Comprehensive lecture notes for the course Cooperation and Competition (P_BCOCOM) written in English. Examples and images are used to make the text/terms clearer. At the end of the document, there are a number of examples of exam questions with answers.
Cooperation and Competition
Lecturer: Daniel Balliet
Lecture 1: 02 apr 2024
Introduction of Cooperation
We cooperate on different levels, for example in relationships, in groups and organizations
and in society, however, cooperation is not unique to humans.
Are humans naturally cooperative?
Thomas Hobbes, humans are naturally selfish and excessively proud of oneself and
so seek to dominate others and demand their respect, the natural condition of mankind
is a state of war, humans must be controlled by an absolute leader
Jean-Jacques Rousseau, sees human nature as being inherently good, unselfish and
non-violent, man in the state of nature was free, happy and he believes that the concept
of morality is coeval with civilization
Whereas Hobbes relies upon reason and the threat of powerful, centralized authority to
provide an ethical and social system that controls human nature, Rousseau trusts human
nature and advocates opportunity for its free expression.
Interdependence is the mutual dependence between things or people, this is the foundation of
society
Mutual dependence or interdependence, this is the degree of how much each person’s
outcomes are determined by how each person behaves in that situation
Power or asymmetrical dependence, this is the degree to which an individual
determines their own and other’s outcomes, while others do not influence their own
outcome
Conflict of interests or correspondence of interests, this is the degree to which the
behavior that results in the best outcome for one individual, results in the worst
outcome for the other person
The perceptions of the different
interdependence levels are
Mutual dependence, ‘we need each
other to get our best outcome in this
situation’
Conflict, ‘what satisfies me, also
satisfies the other’, so if I want to get
something, it will be at the cost of another
Power, ‘who do you feel was most in control of what happened in the situation?’
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,The traditional theory of human nature attributes to Adam Smith, he conceives human beings
as selfish, egoistic, exclusively concerned with self-love and an unquenchable desire for the
most extravagant forms of material wealth.
He believed that individual rationality can lead to collective irrationality:
Individual rationality, a person is taken to be rational if that person, given his
information, chooses the action that maximizes his objective, whatever that objective
happens to be, these are sensible actions and decisions
Collective irrationality, collective irrationality is quite the opposite and can be the
result of individual rationality, if all people will only make decisions that are the best
option for themselves, the collective will fall apart, besides that it is often defined as
collective unsound or unreasonable behavior of a group
A social dilemma is a situation that creates a conflict between the individual’s interests and
the collective’s interests, such that the individual obtains better outcomes following strategies
that over time, will lead to suboptimal outcomes for the collective.
Self-interest versus collective interest
One behavior provides the best outcome to oneself, regardless of what others choose
Another behavior provides the best outcome to the collective (dyad or group), but a
reduced outcome for the self
If everyone chooses the best outcome for the self, then everyone ends up with a worse
outcome than if everyone chooses the best outcome for the collective (individual
rationality and collective irrationality)
How do humans resolve these dilemmas? The study of human cooperation examines
decisions and behavior in these social dilemmas to understand cooperation.
We can encounter social dilemmas in almost any social relationship, behavioral scientists
want to know what causes individual’s behavior in these dilemmas.
We have developed several primary tools (paradigms) for studying these behaviors:
Prisoner’s dilemma, this presents a situation where
two parties, separated and unable to communicate, must
choose between cooperating with the other or not, the
highest reward for each party occurs when both parties
choose to co-operate, this shows that acting in your
self-interest may not always lead to an optimal outcome
Public goods dilemma or ‘give-some’ dilemma, this is a situation in which the whole
group can benefit if some of the members give something for the common good but
individuals benefit from ‘free-riding’ if enough others contribute, all can benefit from
a collective resource (a public good), regardless of who contributed to it
Resource dilemma or ‘take-some’ dilemma, entails a conflict between self-interests
and the welfare of a group or society at large, if the majority of the individuals failts to
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, restrain themselves, scarce common resources such as water and forests, will be
depleted or polluted
In a prisoner’s dilemma, the rule of thumb is T > R > P > S, where T is for temptation
outcome, R is for reward for cooperation, P is for punishment for defection and S is for sucker
outcome, T must always be greater than R.
Public goods dilemma, people decide to make contributions to a dyad or a group, there is a
temptation to free-ride on others contributions, issues with public goods dilemmas:
Jointness of supply, no matter how many people use the public good, it can never be
completely consumed
Impossibility of exclusion, people cannot be excluded from using the public good,
even if they don’t contribute to it
There are two types of public goods: the first is step-level, contributions much reach a
specific amount before the goal is provided (like building a bridge), the second is continuous,
any amount contributed adds to the quality and provision of the public good (like donating to
charity).
Step-level versus continuous PGD
Step-level PGD, sometimes it is in the best interest of the individual to cooperate,
depending on what the others choose, this can be viewed as a coordination game and
can increase the levels of cooperation
Continuous PGD, an individual’s best strategy is to always defect, regardless of what
others choose, this game always involves a conflict of interests
Resource dilemmas, people decide how much to take from a common resource pool, there is a
temptation to take as much for the self as possible, issues with resource dilemmas:
How much can people harvest? At what rate is the resource replenishable? When does
a resource become depleted?
Optimal harvest level, if everyone consumes the resource at this rate, then the
resource is sustainable
Optimal + (IPS)(r) / (N)(r + 1 ), where IPS stands for initial resource size, R stands for
replenishment rate and N stands for group size
Lecture 2: 02 apr 2024
Solutions to Social Dilemmas
Not all of the dilemmas mentioned earlier, or even within certain types of dilemmas, involve
the same degree of conflict of interests, that is, sometimes the self-interest might me more
aligned with cooperation than in other contexts
This can be represented by the cooperation index: K = (R) – (P) / (T) – (S)
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