Sunday, 30 August 2009

PLoS One Paper - Accidental Outcomes Guide Punishment in a “Trembling Hand” Game

An interesting paper from Fiery Cushman, Anna Dreber, Ying Wang, and Jay Costa from the (Department of Psychology at Harvard University, Cambridge, Massachusetts) on PLoS One (here). The results do seem to be intuitively as you might expect. The paper is nevertheless very interesting.
How do people respond to others' accidental behaviors? Reward and punishment for an accident might depend on the actor's intentions, or instead on the unintended outcomes she brings about. Yet, existing paradigms in experimental economics do not include the possibility of accidental monetary allocations. We explore the balance of outcomes and intentions in a two-player economic game where monetary allocations are made with a “trembling hand”: that is, intentions and outcomes are sometimes mismatched. Player 1 allocates $10 between herself and Player 2 by rolling one of three dice. One die has a high probability of a selfish outcome, another has a high probability of a fair outcome, and the third has a high probability of a generous outcome. Based on Player 1's choice of die, Player 2 can infer her intentions. However, any of the three die can yield any of the three possible outcomes. Player 2 is given the opportunity to respond to Player 1's allocation by adding to or subtracting from Player 1's payoff. We find that Player 2's responses are influenced substantially by the accidental outcome of Player 1's roll of the die. Comparison to control conditions suggests that in contexts where the allocation is at least partially under the control of Player 1, Player 2 will punish Player 1 accountable for unintentional negative outcomes. In addition, Player 2's responses are influenced by Player 1's intention. However, Player 2 tends to modulate his responses substantially more for selfish intentions than for generous intentions. This novel economic game provides new insight into the psychological mechanisms underlying social preferences for fairness and retribution.

Citation: Cushman F, Dreber A, Wang Y, Costa J (2009) Accidental Outcomes Guide Punishment in a “Trembling Hand” Game. PLoS ONE 4(8): e6699. doi:10.1371/journal.pone.0006699
The opposite situation also seems to occur. In this setting Player 1 takes a punt at promising an outcome which has a reduced chance of coming true. When the desired outcome occurs, then Player 2 is likely to over-reward Player 1 (even though he/she may have had little influence over the outcome).

Examples of this are seen everywhere around us:
  • Fortune telling
  • Competitive sport coaching
  • Bonus culture in financial institutions.
  • Perceptions of health care including private medicine - 'The best doctor is the last doctor to see the patient' - yet the patient may have recovered for many reasons other than the direct effect of the last doctor.
Posted by ALCHEssMIST.

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