Inducing a self-fulfilling prophecy in public goods games
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Universidad de Granada. Departamento de Teoría e Historia Económica
Self-fulfilling prophecyPublic goods gameGrim trigger strategyCooperationAutomataBeliefs
Brañas-Garza, P.; Fatás, E.; Guillén, P. Inducing a self-fulfilling prophecy in public goods games. Universidad de Granada. Departamento de Teoría e Historia Económica (2006). (The Papers; 06/01). [http://hdl.handle.net/10481/31484]
This study explores how a self-fulfilling prophecy can solve a social dilemma. We ran two experimental treatments, baseline and automata. Both consisted of a finitely repeated public goods game with a surprise restart. In the automata treatment it was announced that there might be automata playing a grim trigger strategy. This announcement became a self-fulfilling prophecy. That is, most participants actually followed a grim trigger strategy in the automata treatment resulting on an increase on the average contributions to the public good relative to the baseline treatment. Moreover, four out of nine groups managed to fully cooperate almost until the last period. Furthermore, after the surprise restart, when the automata threat is less credible, subjects’ behavior was very close to that in the original game.