Tag Archives | Venture Game

Well-enforced norms create an opportunity for norm breakers to cooperate in ventures requiring trust. This is realized when norm breakers, by sharing evidence of their breaches, make themselves vulnerable to denunciation and therefore trustworthy. The sharing of compromising information (SCI) is a strategy employed by criminals, politicians, and other actors wary of their partners’ trustworthiness in which the cost of ensuring compliance is offloaded on clueless norm enforcers. Here we introduce SCI as a sui generis cooperative strategy and test its functioning experimentally. In our experiment, subjects first acquire the label “dove” or “hawk” depending on how cooperative or uncooperative they are, respectively. Hawks acquire compromising information embodied in their label and can reveal it before an interaction with trust at stake. Unlike doves, hawks who reveal their label make themselves vulnerable to their partners, who can inflict a penalty on them after interaction. We find that even students in as artificial a setting as a computerized decision laboratory grasp the advantage of SCI and use it to cooperate. Our results corroborate the idea that compromising information can be conceived as a “hostage” that, when mutually exchanged, makes each party to the interaction vulnerable and therefore trustworthy in joint endeavours.

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