Cooperation, Reputation Effects, and Network Dynamics: Experimental Evidence

Abstract

While social network structures are thought to promote cooperation through reputation effects, as suggested by Raub and Weesie (1990), the option of partner choice may undermine these reputation effects in networks. This article approaches this dilemma by comparing the effects of partner choice and reputation diffusion in isolation as well as in combination in a controlled experimental setting. While we do not find that cooperation rates in the absence of partner choice are higher in the presence of reputation effects, we find that emerging cooperation levels near the end of the game are higher when initial cooperation levels are higher. This is more in line with predictions of models of cooperation that rely on learning heuristics rather than forward-looking rationality (i.e., Corten and Cook, 2009). Moreover, we find that the option of partner choice lowers cooperation rates in the absence of reputation effects. However, we do not find a similar effect in the presence of reputation effects. We position these findings in the larger literature on the conditions for cooperation in dynamic societies.