What drives cooperative behaviour among people when dealing with others? What is the determining characteristic that leads us to adopt those actions that will be beneficial not only to us but for others around us?

Economists and other social scientists provide different answers to this question. Cooperation may originate from warm feelings: consideration of others can motivate us towards generous and cooperative behaviour (e.g. Dawes and Thaler 1988; Isaac and Walker 1988;  Fehr and Gaechter 2000; Fehr and Schmidt, 1999; Falk, Fehr and Fischbacher 2008; among others). According to this suggestion, a cohesive society is one where good generous feelings inspire our actions. Another suggestion is that good norms and institutions provide us with the blueprint for socially useful behaviour. According to this suggestion, a harmonious society is one built on good norms consistently followed (e.g. Putman, 1994; Coleman, 1988; among others) or on well-working institutions inherited from the past (e.g. Acemoglu, Johnson and Robinson, 2001; among others). Finally, another possibility is that insightful self-interest guides us to become effectively good citizens. According to this suggestion, cooperation arises in society if people are smart enough to foresee the social consequences of their actions, including the consequences for others.

In a recently published paper, we test these three possible suggestions experimentally and find overwhelming support for the latter: intelligent people are the primary condition for a socially cohesive, cooperative society. In contrast warm feelings and good norms only have a small transitory effect.

The study

The experiments we implement are based on repeated games, where two people know that they will meet again, allowing them to condition their decisions on what the other person has done in the previous periods. The repetitions have a random termination, with a frequency controlled by the experimenter. A higher continuation probability models a more lasting social interaction. These repeated games are non-zero-sum games: that is, there is room for cooperative, mutually beneficial, behaviour and for selfish, mutually damaging behaviour. This is an essential feature, and reflects the properties of the interactions we experience most frequently in society.  We then create two groups of subjects: the two groups differ according to one of the three characteristics we have mentioned earlier, good heart, good norms, and intelligence. We pay particular attention to the frequency of choice of cooperative rather than non-cooperative behaviour, called cooperation rate.

We study several games; we consider first the prisoner’s dilemma (PD). In the PD, defecting gives a higher payoff to a player, independently of the action of the other, when the game is played only once. If the game is infinitely repeated the cooperative action can become optimal for the individual, producing an equilibrium where both players cooperate in every period, under the threat of reverting to the defecting equilibrium after a deviation. Note that at this equilibrium there is a trade-off between the current payoff (which is larger if a player defects) and long run payoff (which is smaller if the player defects).

Figure 1. Cooperation rates across intelligence groups

We measure intelligence with performance in the Raven progressive matrices test. When we create groups according to intelligence, where subjects of one group are of higher intelligence than those in the other, we observe that the higher intelligence group learns to cooperate. Almost full cooperation is achieved among subjects in the same experimental session. Instead, in the group of less intelligent subjects the cooperation rate declines from the initial level. Figure 1 illustrates this result. To test for the possible effect of warm feelings, we create groups according to their level of agreeableness and for adherence of social norms we create groups according to conscientiousness. The stark differences found with intelligence are not seen in figures 2 and 3 where we depict and contrast the cooperation rates across agreeableness and conscientiousness groups.

Figure 2. Cooperation rate across conscientiousness groups

Figure 3. Cooperation rate across agreeableness groups

Investigating the effect of intelligence in simpler games

To gain more insight how intelligence affects cooperation or learning to cooperate, we analysed the behaviour of the two intelligence groups in simpler games, where the trade-off between current payoff and long-run payoff is absent. The Stag Hunt (SH) game is one example. In SH, players must decide whether to hunt a stag or a hare. Hunting a stag yields a higher payoff if the other player also hunts a stag, but a low payoff if the other hunts a hare. When this game is repeated, once both players manage to coordinate in hunting a stag they have nothing to gain either in the short or in the long run from deviating and hunting a hare. Remarkably, we observe little difference between high and low intelligence groups in these games. Both groups coordinate on hunting a stag early on and do not change their behaviour up until the end of their interaction.

Why do we find that intelligence plays a role only in games with a short- vs long-term trade-off? Our conjecture is that this is due to the so-called goal neglect in lower intelligence individuals reported in Duncan et al., 2008. The authors experimentally show that more intelligent people tend to be more consistent with previously chosen strategies. In our setup, when an individual plays a game where short-term objectives conflict with long-term ones, they are more likely to neglect their long-term goal and to make errors, namely payoff reducing choices.

Overall, recent research has been studying how education can help from early childhood to develop cognitive ability. Our results indicate how such interventions need not only benefit the individuals but society as a whole. Additionally, studies have shown how poverty directly impedes cognitive function. It could be argued, thus, that our results offer a link to poverty enhancing conflict due to the impediment on cognitive function. Hence, policy to tackle conflict in poverty-burdened areas could be aimed at developing cognitive ability.

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Notes:

• This blog post is based on the authors’ paper “Intelligence, Personality, and Gains from Cooperation in Repeated Interactions”, Journal of Political Economy, Vol 127, No 3 (June 2019).
• The post gives the views of its authors, not the position of LSE Business Review or the London School of Economics.
• Featured image by skeeze, under a Pixabay licence
• Before commenting, please read our Comment Policy

Eugenio Proto is a professor at the University of Bristol’s School of Economics, Finance and Management. His research interests are in behavioural and experimental economics, economic development and growth. He is also affiliated with the Centre for Economic Policy Research (CEPR), the Institute of Labour Economics (IZA), the CESifo group, and the Centre for Competitive Advantage in the Global Economy (CAGE).

Aldo Rustichini is a professor of economics at the University of Minnesota. He has a B.A. in philosophy from the University of Florence, an M.A. in economics from the University of Manchester and a Ph.D. in Mathematics from the University of Minnesota. He specialises in economic dynamics, game theory, mathematics for economists, microeconomic theory; models of bounded rationality and political economy.

Andis Sofianos is a postdoctoral fellow at the University of Heidelberg’s chair of economic theory II. He has a PhD from the University of Warwick. He is interested in experimental economics. He studies the impact of individual characteristics, like personality traits and intelligence, on strategic interactions and the labour market. His current work is focused on trusting and cooperative behaviours.

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