Sharing Compromising Information as a Cooperative Strategy

• In Event: 1249 - Theoretical and Empirical Advances in Rationality and Society

Abstract

When people have reasons to distrust one another, as criminals do for instance, they could still cooperate by sharing compromising information (SCI) with which to blackmail each other and ensure compliance. The content of this information would consist of any norm breach which once credibly revealed triggers punishment by a norm enforcer. Here we introduce SCI as a mechanism which can promote cooperation even in unfavourable situations and test its functioning experimentally. In our lab experiment, subjects first acquire a label based on how cooperative they are in a series of dyadic interactions with trust at stake. Cooperative and uncooperative subjects are labelled “doves” and “hawks” respectively. We then vary whether subjects’ labels are revealed automatically or by their own choosing, and whether hawks who are made or make themselves known as such can be inflicted a monetary penalty. Without the option to hide their label or inflict a penalty on hawks, doves cooperate with doves and avoid hawks, whereas hawks accept to interact with both doves and hawks, but mostly to defect. This pattern hardly changes after subjects are given the choice to reveal their label before each interaction. Once the possibility to penalize hawks is introduced, hawks meeting a dove fear the “stick” and prefer to stay out. However, the proportion of hawks who interact and cooperate with each other increases. Although few in numbers, some hawks understand the strategic advantage of SCI and reveal their label in order to cooperate. In this group of hawks, remarkably, cooperation reaches the same proportion it does among doves. Our results corroborate Thomas Schelling’s initial idea that compromising information can be conceived as a “hostage” which, when mutually exchanged, makes each party to the interaction vulnerable and therefore trustworthy in joint endeavours.

Authors

• Wojtek Przepiorka, Utrecht University

• Diego Gambetta, European University Institute