Detecting Other-Regarding Behavior with Virtual Players

Abstract

Individuals in society and players in laboratory experiments often display levels of cooperative behavior that contradict the predictions of theoretical models of rational self-interested individuals. Leading explanations for these anomalies include decision errors and other-regarding behavior. This paper introduces virtual players in two public goods experiments as a device to remove the concerns of human subjects for other players. Comparing contributions in all-human and virtual subject treatments, we find support for the hypothesis that other-regarding behavior elevates contributions. The result also suggests that subjects are motivated by fairness considerations and we conclude that fair-share contributions are not made simply because they are cognitively simple to compute. We discuss ways in which the virtual player technique can be applied to help discriminate among competing explanations for the behavior observed in other experiments.