Motoki Watabe (Waseda University, JAPAN ) Contributors: Yoshitsugu Yamamoto and Sho Tsuboi Reputational Information in “Noisy” Interactions: Experimental Studies

What I want to say Unconditional Cooperation strategy can produce more reliable reputational information than reciprocal strategies in noisy exchange.

A B EXCHANGE Ｘ ObserveImpression A Model of Reputational Information Person A and B exchange their resources repeatedly. ≒ They play PD repeatedly. Person A’s reputation 1.Source 1: A’s evaluation on him/herself 2.Source 2: B’s evaluation on A 3.Source 3: X’s evaluation on A

A B EXCHANGE Ｘ ObserveImpressi on Reliability of Reputational Information Person A’s reputation 1.Source 1: A’s evaluation on him/herself 2.Source 2: B’s evaluation on A 3.Source 3: X’s evaluation on A Past research assume that reputational information is always objective and reliable. Source 1 = Source 2 = Source 3 Intuitively, Source 1 < Source 2 < Source 3 Source 3 seems to be the most objective and reliable. However, the reliability of source 3 is not always guaranteed.

Outline of the presentation 1. People have a bias of reputational information processing.  Experiment 1 2. Reciprocal strategies reduce reliability of reputational in social exchange. 3. Unconditional strategies can produce reliable reputational information.  Experiment 2 & 3

A B EXCHANGE Ｘ ObserveImpression A Model of Reputational Information X’s impressions on A and B are reputational information to distribute other people. Person A and B exchange their resources repeatedly. ≒ They play PD repeatedly. A is a person like B seems to be*****

Two functions of reputation(Raub 2002, Yamagishi 1998) 1. Control: In order to get future exchange partners, you need to have good reputation 2. Learning: In order to get a good exchange partner, you need to find a person with good reputation Given these functions, people always have motivations to establish good reputation. Prediction Negative reputational information is more important to predict others’ behavior than positive reputational information.

People have a bias of reputational information processing.

Number of Good Reputation Number of Bad Reputation Total Score

Experiment 1 Hypothesis: People take NEGATIVE reputation more seriously than POSITIVE reputation. Participants : Thirty seven undergraduate students Procedure 1. They were in a hypothetical auction situation 2. They were assigned as “buyer” trying to seek a good deal for a $200-value product. 3. They looked at reputation of 64 sellers. 4. They evaluate degree of each seller’s trustworthiness as a potential partner in the hypothetical auctions.

この人は ％くらい信頼できると思う（ 0 から 100 までの数字でお答えください） Num of GOOD info 0,1,2,3,8,12,24,48 Num of BAD info 0,1,2,3,8,12,24,48 8x8=64 combinations How much impact for one increment of information 8x8=64 combinations How much impact for one increment of information Experimental Design : 64 different set of reputation

Take absolute Values Analysis

Negative information has more impact than Positive information, especially when the number of information is small Negative information has more impact than Positive information, especially when the number of information is small

Reciprocal Strategies and Misunderstandings Ex.: B takes Tit-for-Tat and A takes unconditional defection. Both continue to defect except the first move. Both A and B are not Cooperative persons! ☹ A B EXCHANGE Ｘ ObserveImpression

Amplified misunderstanding by Noise Ex ： Both A and C take TFT. They are actually cooperative, but it often turns out mutual defection. Uhmmm… Both A and B are not cooperative! ☹ Social exchange are noisier than economic exchange (Kollock 1993) Noise A B EXCHANGE Ｘ ObserveImpression

Strategies producing reliable reputational information Reciprocal strategies not good ones in terms of producing reliable reputational information Repeated Noisy Question: What strategy is good for production of reliable reputational information ? Always consistent behavior regardless others’ behavior Unconditional Defection (UD) Unconditional Cooperation (UC) UC has two advantages for creating reliable reputation.

No.1: UC is more likely to be recognized as UC than reciprocal strategies A EXCHANGE Strategy A UC Noise I don’t know exactly, but Pink Person seems to be GOOD! Noisy situation

Experiment 2 Participant looked at the same set of players exchanging with and without noise Hypothesis: The evaluation on UC is more consistent across with or without NOISE than the evaluation on Reciprocal strategies (TFT) Participant NoiseNo Noise Evaluation Evaluate Target Person Difference

Experiment 2 Participants looked at actors playing repeated PD games (actually programmed, but they were told that the actors were real persons). They then evaluate target actor’s trustworthiness with 7- point schale. (Beggan, Messick, & Allison, 1988) コンピューター同士の交換 Exchange by two programmed actors Repeated PD (10 times per set)

Four strategies and noise Name Strategy UC Always cooperate TFT Cooperate at the first game, cooperate if and only if the other cooperated in the previous game. TFTB Basically same as TFT, but when the other have cooperated two times in the raw, this chooses defection with 67% of prob. in the current game. UD Always defect Exchange by two simulated actors With-Noise Condition : Each player misunderstands other’s choice with 10% of probability. Without-Noise Condition : No misunderstanding occurs 4x4=16 combinations

Experiment 2 : results Participants: Forty seven undergraduate students Results UC is the most robustly evaluated strategy F(3,135)=8.85, p<.001 UC is the least affected by noise. UC can produce robust reputation.

A X EXCHANGE STR A STR X X is reciprocal strategy ?? ? ? Observers Situation 1

A UC EXCHANGE STR A UC UC is Easy to be recognized Vulnerable Cooperative Situation 2 No.2 ： UC is able to declare the other strategy’s characteristics. A seems to be ! !!!

Basic Idea of Expt3 Difference between Participant’s evaluation and actual ranking of exploitiveness. The more error, the less reliable reputational information. Participant A B C Target strategies (Programmed) Very exploitive Exploitive Less exploitive Well.. B is the Best ① ③ ② I guess C is the worst! She wrongly evaluates A and B One error occurs.

Independent Variables A B C Target strategies (Programmed) Very exploitive Exploitive Not exploitive Three kinds of strategies UC TF2T: Defects if and only if the partner defected two times in a raw (Generous) Tit-for-Tat Less Error More Error

Experiment 3 (Design) A B C Target strategies (Programmed) Very exploitive Exploitive Less exploitive NameDescription of strategy Less Exploitive Basically same as TFT. It defects just one time after the partner cooperated two games in the row. Exploitive Basically same as the above “Less Exploitive,” and it may defects two times in a raw with 67% of probability. Very Exploitive Basically same as the above “Less Exploitive,” and it may defects two times in a raw with 80% of probability.

Procedure Participants: Eighty six undergraduate students. They looked at video clips that three pairs playing repeated PD game (15 times per pair) They then prioritized the three BROWN strategies as potential partners. Participant A B C Target strategies (Programmed) Very exploitive Exploitive Less exploitive Observe & evaluate UC, TF2T, or TFT

Results of Experiment 3 F(2,81)=9.81, p<.001 UC produces more reliable reputational Information than reciprocal strategies TF T TF2 T UCUC Mean score of Error Pink strategy

Summary 1. People have a bias in reputational information processing.  Negative reputation > Positive Reputation (Expt 1) 2. Reciprocal strategies reduce reliability of reputational in social exchange. Unconditional strategy(UC) can produce reliable reputational information.  UC is easy to be recognized as GOOD even in noisy situation.(Expt 2)  UC makes it clear the exploitiveness of other strategies(Expt 3).

To do list… How about Unconditional Defection (UD)?  My prediction  Probably, UD also has the ability to produce reliable reputational information as well as UC.  However, this ability is VERY BAD for UD to survive. Is this ability adaptive for UC ? Useful to survive?  Already conduced a computer simulation study to find the conditions under which UC is adaptive for this bility.  Preliminary results say that UC needs help from TFT, and TFT also needs help from UC in noisy conditions.

Thank you ☺