Gregory L. Poe

Detecting other-regarding behavior with virtual players

Humans display levels of cooperative behavior that contradict the predictions of theoretical models of rational self-interested individuals. We propose a novel technique to discriminate among other-regarding behavior, self-interested strategic play, and decision errors in laboratory experiments. We introduce “virtual players” in two public goods experiments to remove the concerns of human subjects for other players. Comparing contributions across treatments, we find that other-regarding behavior elevates contributions. The results also suggest that subjects are motivated by fairness considerations. We discuss ways in which the virtual-player technique can discriminate among competing explanations of behavior observed in other experiments.