What's the science?
Behavioral economics is a field of research examining how human cognitive biases often interfere with fully rational or 'optimal' behavior. One effect known as the 'decoy effect' shows that when given two options in a decision-making scenario, a third less desirable option can change the desirability of the other options (even when it wouldn’t be expected to). Evolutionary game theory is a field of research which studies how humans make decisions to optimize their payoff or reward in relation to others. One concept called ‘selection’ describes how we use rational thinking to eventually eliminate suboptimal behavior over time. We don’t know how the path to optimal behavior might change when attempting to make decisions involving others in the presence of a decoy effect. This week in Nature Communications Wang and colleagues examine how behavior is affected by the presence of a decoy during a decision-making task called the Prisoner’s Dilemma.
How did they do it?
Behavior was examined in 388 volunteers during the Prisoner’s Dilemma; a well-established decision-making task in which a participant is required to either cooperate (a safe option with less reward) or defect (betray the opponent for a greater payoff). The game centers around two players, one a human participant and the other a computer opponent who the participant is trying to play against to maximize their reward. The computer opponent is learning the behavior of the participant and therefore the game is a balancing act of cooperation and defection. Typically, participants have a tendency to defect more (the payoff is disproportionately greater) even though it is not in their best interest to do so, as cooperation of both parties would result in an optimal payoff. The authors introduced a third irrelevant option, a decoy called ‘reward’, where the participant could reward their opponent. They monitored the participants’ tendency to cooperate and defect with and without the presence of the ‘reward’ decoy option.
What did they find?
When the ‘reward’ decoy option (i.e. the option to reward the opponent) was present, the participants showed an increase in cooperative behavior (median frequency of 60.5%) compared to the control condition (median frequency of 31.4%), despite that fact that they did not choose the decoy option often. These results suggest that the mere presence of the option to reward an opponent results in greater cooperation. They found that the presence of the decoy resulted in both an increase in cooperation before the reward (i.e. decoy) option had even been chosen (i.e. first round) and increased the choice to cooperate following a cooperative choice or a reward (i.e. decoy) choice. Further, this effect was stabilized over time. These results suggest conditional cooperation by participants (also known as tit-for-tat) depending on their opponent’s most recent actions. They also found that this increased cooperativeness did not lead to a greater payoff overall, nor did choosing the reward option lead to a greater payoff overall. However, the probability of success was increased for those individuals who were more cooperative.
What's the impact?
This is the first study to demonstrate that the presence of a decoy (despite being an inferior option) promotes cooperative behavior in a game theory decision-making task. These findings suggest that decoys may ignite prosocial behavior across a range of social activities which could result in better outcomes for cooperative individuals. This study has important implications for social decision-making in society.
Wang et al., Exploiting a cognitive bias promotes cooperation in social dilemma experiments. Nature Communications (2018). Access the original scientific publication here.