DYNAMIC PROBABILITY OF REINFORCEMENT FOR COOPERATION: RANDOM GAME TERMINATION IN THE CENTIPEDE GAME - University of ...

 
JOURNAL OF THE EXPERIMENTAL ANALYSIS OF BEHAVIOR                     2018, 109, 349–364             NUMBER   2 (MARCH)

          DYNAMIC PROBABILITY OF REINFORCEMENT FOR COOPERATION: RANDOM
                     GAME TERMINATION IN THE CENTIPEDE GAME
                      EVA M. KROCKOW, ANDREW M. COLMAN, AND BRIONY D. PULFORD
           DEPARTMENT OF NEUROSCIENCE, PSYCHOLOGY AND BEHAVIOUR, UNIVERSITY OF LEICESTER, U.K.

        Experimental games have previously been used to study principles of human interaction. Many such
        games are characterized by iterated or repeated designs that model dynamic relationships, including
        reciprocal cooperation. To enable the study of infinite game repetitions and to avoid endgame effects
        of lower cooperation toward the final game round, investigators have introduced random termination
        rules. This study extends previous research that has focused narrowly on repeated Prisoner’s Dilemma
        games by conducting a controlled experiment of two-player, random termination Centipede games
        involving probabilistic reinforcement and characterized by the longest decision sequences reported in
        the empirical literature to date (24 decision nodes). Specifically, we assessed mean exit points and coop-
        eration rates, and compared the effects of four different termination rules: no random game termina-
        tion, random game termination with constant termination probability, random game termination with
        increasing termination probability, and random game termination with decreasing termination proba-
        bility. We found that although mean exit points were lower for games with shorter expected game
        lengths, the subjects’ cooperativeness was significantly reduced only in the most extreme condition with
        decreasing computer termination probability and an expected game length of two decision nodes.
           Key words: Centipede game, random game termination, backward induction, endgame effects, cooper-
        ation, reciprocity

   Cooperative human interactions have fre-                   decision contexts, circumstances outside of the
quently been modeled by repeated or sequen-                   players’ control can prematurely end a
tial games, including the Repeated Prisoner’s                 sequence of cooperative turns, for example if
Dilemma game and the Centipede game. These                    one player is forced to leave, or dies.
games provide abstract decision contexts where                   To provide a methodological implementation
two or more players can choose repeatedly                     of indefinite game repetitions with random stop-
between cooperation and defection, either                     ping through external forces, random game ter-
cooperatively sharing a pot of money with the                 mination was introduced as an alternative to
other player or selfishly choosing a larger share              finitely repeated games (Roth & Murnigham,
for themselves (Krockow, Colman, & Pulford,                   1978). Unlike more traditional games with
2016a). These abstract decision tasks enable the              explicit, finite horizons (e.g., Selten & Stoecker,
study of fundamental principles underlying                    1986), this termination rule involves players
human relationships. However, an aspect that                  being informed of the probability that a further
has often been neglected in experimental                      game round will be played but not which partic-
designs is the possible effect of external factors            ular round will be the last. Random game termi-
such as random interventions, modeled in game                 nation was claimed to avoid an endgame effect.
theory by a player called Nature. In real-life                The term ‘endgame’ refers to the final stage in
                                                              a game of chess, but has also been applied to
                                                              the analogous stage in an experimental game—
   The research reported in this article was supported by     the final decisions in the game. The endgame
awards from Friedrich Naumann Stiftung für die Freiheit       effect, in turn, denotes the behavioral phenome-
to the first author and from the Leicester Judgment and        non that cooperation—even if stable through-
Decision Making Endowment Fund (Grant RM43G0176)              out most of the game—suddenly drops when
to the second and third authors. The authors are grateful
to Eike Buabang, who helped with data collection, and
                                                              the players can predict that they are approach-
Kevin McCracken and Jodil Davis, who helped with soft-        ing the end of the interaction (Andreoni, 1988).
ware development.                                             Random game termination was introduced to
   Address correspondence to: Eva M. Krockow, Depart-         allow for the study of infinitely extended games
ment of Neuroscience, Psychology and Behaviour, Univer-       (Dal Bó & Fréchette, in press; Fréchette &
sity of Leicester, Leicester LE1 7RH, United Kingdom. E-
mail: emk12@le.ac.uk, Telephone: +44 (0)116 229 7084,
                                                              Yuksel, 2017; Normann & Wallace, 2012). Based
Fax: +44 (0)116 229 7196                                      on these methodological advantages, random
   doi: 10.1002/jeab.320                                      game termination rules may increase real-life

© 2018 Society for the Experimental Analysis of Behavior
                                              349
350                                  EVA M. KROCKOW et al.

applicability of repeated games, because human      arguably consistent with the matching law,
social interactions are rarely characterized by     according to which the relative frequency of
complete-information contexts with finite hori-      responses (in this case, cooperative decisions)
zons (Dal Bó, 2005; Jiborn & Rabinowicz, 2003).     closely approximates the relative frequency of
   Most experimental research using random          reinforcements in concurrent reinforcement
termination designs has been conducted on           schedules (Herrnstein, 1961).
the repeated Prisoner’s Dilemma game                   However, only few studies (e.g., Engle-Warnick
(RPDG), the iterated version of the dyadic,         & Slonim, 2004) have investigated random termi-
one-shot Prisoner’s Dilemma (PD), frequently        nation rules in games other than the RPDG, and
referred to as the most fundamental example         no empirical research has studied random termi-
of all social dilemmas (Colman & Pulford,           nation rules in Rosenthal’s (1981) Centipede
2015; Rapoport, Seale, & Colman, 2015; Roth,        game (CG) (see Fig. 1). In this sequential game
1995). The PD, originally named by Tucker           with complete and perfect information, two
(1950/2001), describes a strategic decision         players A and B take turns in deciding between
context in which two suspects have been             two alternatives: a cooperative GO move that
arrested for a joint crime. Both individuals        leads the game to continue horizontally across
have to choose (separately and simulta-             the game tree, and a noncooperative STOP
neously) between selling out the other person       move that terminates the game through an
(defection) and staying quiet (cooperation).        immediate, downward exit move, leaving the
Their sentences will be long if both of them        defector with a relatively favorable payoff com-
decide to sell out, and shorter if both remain      pared to the other player. In the example CG, a
silent, but if one person chooses betrayal while    GO choice always decreases a player’s payoff by
the other stays silent, then the defector will go   three units and increases the co-player’s payoff
free and the cooperator will suffer the maxi-       by seven units. In this case, the joint payoffs of
mum sentence. Despite describing a specific          the player pair increase linearly from one exit
decision scenario, the PD can be abstracted to      point to another, but exponentially increasing
model a general strategic dilemma that crops        versions are also frequently studied. The subgame
up in many economic, political, and interper-       perfect Nash equilibrium of the CG, as derived
sonal interactions. The RPDG refers to deci-        through backward induction (BI) reasoning, is
sion contexts in which two individuals              the unconditional STOP move by Player A at the
complete multiple PDs in a sequence. Roth           first decision node, even though both players
and Murnighan’s (1978) first investigation of        would receive higher individual payoffs following
random termination rules in RPDGs suggested         just one cooperative move each (for a discussion
that lower termination probabilities increased      of BI in the context of the CG see Aumann, 1995,
cooperation relative to higher probabilities.       1998; Colman, Krockow, Frosch, & Pulford,
   More recently, Dal Bó (2005) conducted a         2016). This surprising conclusion of backward
comprehensive experiment on RPDGs using             induction reasoning is also consistent with proba-
three different random termination rules with       bility discounting—the finding that individuals
expected lengths of one, two, and four game         generally prefer smaller certain rewards to larger
rounds respectively. Additionally, they com-        lower-probability rewards, the effect being most
pared these conditions to finite-horizon games
with matching numbers of expected game
rounds. The results confirmed the earlier find-
ings of Roth and Murnighan (1978), suggesting
that decreasing the likelihood of game termina-
tion increased cooperation levels. Furthermore,
the results showed that subjects were likely to
cooperate more in the infinite-horizon RPDGs            Fig. 1. Centipede game with a linearly increasing pay-
than in those of a finite length, even if matched    off function. The game proceeds from left to right. Two
for expected game length. If we interpret the       players (A and B) alternate in choosing between coopera-
probability of game continuation in such            tive GO moves that continue the interaction by moving
                                                    horizontally to the right and noncooperative STOP moves
random-termination games as a proxy for the         that terminate the game by moving down. The numbers at
players’ (anticipated) relative frequency of        the bottom and right are payoffs to both players, with
rewarding payoffs, then the results are also        those of Player A displayed above those of Player B.
RANDOM GAME TERMINATION                                           351

accurately described by a hyperbolic probability        Whereas the CG has received increasing atten-
discounting function (Green & Myerson, 2004;         tion in the literature, with most empirical studies
Myerson, Green & Morris, 2011).                      demonstrating high levels of cooperation and
   While sharing many features of the RPDG,          reliable deviations from equilibrium play
the CG provides a different decision context         (e.g., Bornstein, Kugler, & Ziegelmeyer, 2004;
and deserves investigation in its own right. In      Krockow, Colman, & Pulford, 2016b; Krockow,
the CG, the decision to defect terminates the        Pulford, & Colman, 2015; McKelvey & Palfrey
entire interaction, and its consequences are         1992), only short CGs with finite horizons have
irrevocable. Retaliation through strategies such     been investigated so far. The longest CG used in
as Tit for Tat is therefore not possible. Further-   a published, peer-reviewed experiment was
more, it is characterized by a sequential, recip-    Nagel and Tang’s (1998) 12-node game. That
rocal move structure that may offer a closer         game was presented in reduced normal form,
model of many real decision situations than the      which had the additional advantage of assessing
simultaneous decision context of the RPDG            all intended exit points in the game—the struc-
(Krockow et al., 2016a). Finally, the payoffs of     ture and interdependence of players’ decisions
the standard RPDG remain constant through-           in the sequential-move version mean that even
out the decision sequence and therefore cannot       the most cooperative player can never reach late
model the same variety of dynamic incentive          exit nodes when paired with an early-defecting
structures, including exponentially or linearly      co-player. However, although the reduced nor-
increasing payoffs, as the CG.                       mal form is likely to provide more accurate
   An example of the game’s application to           assessments of the prevalence of altruism in an
real-life interactive decisions could include two    experimental sample, it misses out the sequential
neighboring couples who alternate helping            player interaction characteristic of the standard
each other with the baby-sitting. Neither of the     CG and reduces the length of time invested in
couples particularly enjoys looking after the        each game. It presents a fundamentally different
other family’s badly behaved children, and           decision problem and may lead to a significantly
there is always the possibility that one couple      different behavior (Krockow et al., 2016a).
could decide to end the relationship without            Finally, no research to date has investigated
further reciprocation. Nevertheless, in the long     CGs with different termination rules, includ-
run, both couples benefit from the arrange-           ing random game termination, even though
ment, because the cost of performing the chore       these could provide informative insights into
is less than the benefit to the other couple.         decision-making situations under the risk of
   In addition to this social decision-making con-   premature termination. Hence, there is a
text, the CG has biological applications, for        need for the investigation of longer CG
example modeling certain animal mating               sequences with a variety of termination rules
behaviors. Hermaphrodite organisms (i.e.,            (Krockow et al., 2016a).
organisms with both female and male reproduc-           The present study investigated CGs with up to
tive organs) such as the hermaphrodite sea bass      24 moves (twice as long as Nagel & Tang’s 1998
have been found to distribute costly egg produc-     version) and linearly increasing payoffs. Addi-
tion by taking turns with their mates in laying      tionally, we investigated the effects of four dif-
small batches of eggs. This repeated exchange        ferent termination rules, including two novel
of small batches of eggs for fertilization—as        rules of random termination with increasing
opposed to the production of a large batch by        and decreasing probabilities of game termina-
one individual at a time—helps to prevent            tion throughout the decision sequence, respec-
mutant sea bass with male reproductive organs        tively. No study to date appears to have
only from fertilizing all eggs and swimming off      combined random termination rules with finite
without making a similarly large contribution to     game horizons. However, the finite design
reproduction (Binmore, 1998). The CG thus            offers an advantage in the CG inasmuch as it
provides an interesting experimental paradigm        allows for the calculation of mean exit points,
to study mutual trust and related topics of recip-   an index of cooperation widely used in the pre-
rocation, altruism, individual versus group bene-    vious CG literature. Furthermore, as Selten,
fits, and long-term versus short-term payoff          Mitzkewitz, and Uhlich (1997) pointed out, infi-
maximization (e.g., Krockow et al., 2016a;           nitely repeated games are not feasible in prac-
Palacios-Huerta & Volij, 2009).                      tice. Experimental subjects always know that the
352                                    EVA M. KROCKOW et al.

game will have a finite duration, and the time         cooperative interaction between the neighbors.
slot they signed up for provides an effective         Over time and with increasing work experience,
upper bound. Consequently, no experimental            however, job security and financial stability are
game would ever be expected to be infinite.            likely to improve, thus leading to a decreasing
    The study reported below aimed to com-            probability of the relationship being terminated
pare four CG conditions: A: no random game            by environmental factors. Each of the example
termination; B: random termination with a             scenarios maps onto one of our experimental
constant termination probability; C: random           conditions, with the first scenario correspond-
termination with increasing probability; and          ing to Condition B, the second to Condition C
D: random termination with decreasing proba-          and the third to Condition D.
bility. These conditions were based on theoret-          All conditions of the experiment shared the
ical interest and their direct applicability to       same maximum game length of 24 nodes but
different real-life decision contexts.                were designed to differ in their expected game
    Consider again the neighborly relationship of     lengths as based on the random termination
alternating childcare support which was pre-          probabilities. While Condition A without ran-
sented as an example situation earlier. Random        dom termination had an expected game length
termination of the relationship through exter-        of 24 nodes, all random termination conditions
nal factors beyond the neighbors’ control is          had lower expected lengths of approximately
possible and could follow several different func-     4, 9, and 2 nodes, respectively. Previous litera-
tions. In its simplest form, the probability of the   ture reviewed above (e.g., Dal Bó, 2005) showed
relationship being terminated by an external          that random termination games of shorter
factor could take on a fixed value. For example,       expected lengths produced lower cooperation
it is possible to imagine a lethal accident cutting   in the RPDG than games with longer expected
the relationship short. Following each coopera-       lengths. Consequently, we hypothesized a simi-
tive action by either neighbor, an accident           lar decrease of cooperation in Centipede game
could occur by chance, thus rendering either          conditions in which the computer was statisti-
one of the neighboring families unable to             cally more likely to end the game earlier. More
engage in further baby-sitting. The probability       specifically, we used the order of expected game
of such an accident could be fixed (e.g., 1/4)         lengths presented above to arrive at our predic-
and its value could depend on the general riski-      tions of cooperation levels in the individual con-
ness of the neighbors’ lifestyles.                    ditions. Based on this order, Condition D with
    In a slightly different variation of this sce-    an expected length of just over two decision
nario, one of the families could be living in a       nodes was hypothesized to yield the lowest coop-
rented house from which the landlords could           eration levels, followed by Condition B and then
evict them at any time. The landlords may even-       Condition C. Dal Bó (2005) reported that
tually use the property as their own future           games with fixed lengths decreased cooperation
retirement home or as the prospective house           compared to games with random termination
for their children. In this scenario, the land-       rules. However, their treatment games were
lord’s choice would be the external factor            matched for expected game lengths. Given that
potentially ending the neighbors’ relationship        our fixed-length game presented in Condition
prematurely. Although the initial probability of      A was characterized by a comparatively high
the landlord evicting his tenants may be very         expected length of 24 decision nodes, we
low, the probability would increase over time.        hypothesized that this condition would yield
    Finally, consider this third variation of the     higher levels of cooperation than all random-
baby-sitting scenario. The families may have          termination conditions in the experiment.
moved to the neighborhood at an early age and
with uncertain job prospects. Like many young                             Method
professionals, they may initially depend on
short-term work contracts or insecure temping         Subjects
jobs with zero-hour contracts. Given the initial         A total of 148 undergraduate students from
job insecurity, a long-term stay in the area may      the University of Leicester with a mean age of
be questionable, yielding a high early likelihood     19.34 years (SD = 2.86 years) participated in
of forced relocation. Thus, job insecurity could      the experiment (see Table 1). All were incen-
be another external factor terminating the            tivized with a between-subjects random lottery
RANDOM GAME TERMINATION                                            353

                          Table 1                               Hence, at the first node the computer never
          Summary of session and subject details                chose to terminate, and at the game’s end
                                                                (i.e., the computer’s 24th decision node) it
                                       Subjects    Rounds
                    # of     # of         per        per
                                                                terminated the game in 50% of the cases. Con-
Condition         subjects sessions     session    session      versely, in Condition D, the probability of
                                                                game termination by the computer steadily
A: No random         40        2        22, 18        20        decreased from 1/2 at the first node to 0 at
  termination
B: Constant δ        34        2        18, 16        20
                                                                the last node. Hence, at the first node the
C: Increasing δ      40        2        22, 18        20        computer chose to terminate in 50% of the
D: Decreasing δ      34        2        18, 16        20        cases, and at the game’s end it never termi-
                                                                nated. In both Conditions C and D, the mean
                                                                value of δ is 1/4, which is why this value was
system. One person per testing session                          chosen as the constant termination probability
received the payoff from a randomly chosen                      in Condition B. Based on the above probabili-
game completed during the session. The                          ties, the expected termination points T by the
mean cash remuneration of the selected sub-                     computer were calculated to be as follows:
jects was £14.36 ($18.00). We chose to select
                                                                Condition A, TA = 24.00; Condition B, TB =
one game for payment randomly rather than
                                                                4.00, Condition C, TC = 8.99, Condition D,
calculating an average across all games,
                                                                TD = 2.13. The game trees displayed on screen
because previous literature provided evidence
                                                                for the different treatment conditions are
that this method prevents subjects from
                                                                show in Figure 2. Detailed plots of the proba-
responding to the individual game repetitions
                                                                bility functions of games being randomly ter-
merely as parts of one large “supergame”
                                                                minated by the computer at each exit point
(Bardsley, et al., 2010; Bolle, 1990; Cubitt, Star-
                                                                are provided in Figure 3.
mer, & Sugden, 1998). In particular, we
                                                                   As a general measure of cooperation, the
wanted to ensure that subjects responded to
                                                                subjects’ cooperation rates were calculated by
every game as a separate decision context that
                                                                dividing a player’s number of GO moves by
could determine their total payoff in the
                                                                the total number of moves that player made
experiment. Selecting only one subject per ses-
                                                                across all 20 game rounds. In the context of
sion for payment is common practice in
                                                                the present experiment, the proportion of GO
research on experimental games, and informal
                                                                moves provided a more accurate indication of
feedback from subjects confirmed that they
                                                                individual cooperation levels than the mean
were sufficiently motivated by the chance of
                                                                exit points reported in previous studies
winning the money.
                                                                (e.g., Krockow et al., 2016a), because it took
                                                                into account the fewer decision opportunities
Design                                                          in the three conditions with random termina-
   Subjects were randomly allocated to one of                   tion rules, while also capturing the cooperative
four treatment conditions with different CGs.                   moves made in games which were prematurely
Each game offered a maximum of 24 subject                       terminated by the computer.
moves, and the combined payoffs of both                            Additionally, players’ STOP probabilities
players at each node increased linearly from                    were calculated for each individual decision
4 at Node 1 to 100 at the natural end. The                      node to estimate the likelihood of game termi-
four treatment conditions varied only as                        nation at each point in the game. This was
regards the probability δ of random game ter-                   done by dividing the number of players who
mination by the computer, as follows. A: no                     chose to STOP at each decision node by the
random termination; B: constant termination                     total number of players who had reached the
probability δB = 14 following each subject move;                respective node.
C:     increasing            termination         probability
δC = 0, 44 , 44 , …, 21
         1 2
                        ,
                     44 44
                          22
                             ; and D:  decreasing      termi-   Materials
nation probability δD = 22           , 21
                                   44 44  , …,  2 1
                                                  ,
                                               44 44 , 0: In       The testing sessions were carried out in a
Condition C, the probability of game termina-                   large computer laboratory. Each subject was
tion by the computer steadily increased from                    seated at a computer desk, with all desks gen-
0 at the first node to 1/2 at the last node.                     erously spaced out in the laboratory to avoid
354                                       EVA M. KROCKOW et al.

  Fig. 2. Specific Centipede game trees used in the present experiment: (a) Game tree used for Condition A: a long
Centipede game with 24 decision nodes and no random termination by the computer; (b) Game tree used for
Conditions B, C, and D: a long Centipede game with 24 decision nodes and random termination by the computer (ran-
dom termination rules varied across the three conditions).

any communication between subjects. For the                  Subsequent screen displays did not include
anonymous game interaction, a custom-made                 reminders about the computer’s specific ter-
web-based game application was used which                 mination probabilities at each node. We
provided real-time feedback about the sub-                made this decision despite recent literature
jects’ choices, the computer’s choices and the            suggesting that subjects’ responses to linear
current round number. The subjects were pre-              probability functions may frequently be dis-
sented with the game tree of their respective             torted, with subjects behaving as though the
treatment condition. To visualize the com-                likelihood of events with low probabilities are
puter’s options for random termination in the             higher and the likelihood of events with high
last three conditions, additional decision                probabilities lower than they actually are
nodes with the label C for computer were                  (e.g., Zhang & Maloney, 2012). Given that
inserted into the game tree following each                the computer’s termination probabilities in
player’s decision nodes. Several detailed                 Conditions C and D either increased or
instruction slides explained the payoff func-             decreased by 1/44 (0.0227) with each of the
tion and the random termination rule for the              computer’s decision nodes passed, we
relevant treatment condition. For example, in             believed that the small fractions or decimal
Condition C (increasing termination probabil-             numbers would impose an even greater chal-
ity), the instructions read:                              lenge to the subjects’ adaptive learning than
                                                          the linear probability functions explained in
      The Computer is programmed to make                  the instruction slides. The subjects saw eight
      random choices, prefers neither partici-            player nodes at a time, and the display shifted
      pant, and gains nothing itself.                     by eight nodes once the game continued
      The probability that the Computer                   beyond the eighth node. The display shifted
      chooses GO steadily decreases from                  again to the game’s final set of eight decision
      1 (at the first circle) to 1/2 (at the last          nodes if the subjects reached the 16th node.
      circle). This means that in the begin-              We chose to shift the game tree by eight
      ning it always chooses GO and at the                nodes at a time, because a previous experi-
      end it chooses GO in 1 out of 2 times.              ment by Krockow, Colman, and Pulford
                                                          (2017) suggested that subjects struggled with
      The probability that the Computer
                                                          a constantly moving window that always
      chooses STOP steadily increases from                displayed the next eight decision nodes. Addi-
      0 (at the first circle) to 1/2 (at the last          tionally, the experiment included a paper-
      circle). This means that in the beginning           based comprehension test to check for the
      it never chooses STOP and at the end it             understanding of the game’s basic features as
      chooses STOP in 1 out of 2 times.                   well as the different termination rules.
RANDOM GAME TERMINATION                                                    355

  Fig. 3. Subjects’ exit percentages in the experiment and computer STOP probabilities. Graphs show the percentage
of experimental games that were terminated by human subjects at each of the 25 exit nodes in our Centipede games.
Additionally, the calculated probabilities of games being terminated by the computer are displayed at each node. Graphs
A–D correspond to the four conditions with different types of random computer termination.

Procedure                                                    Table 1). In each testing session, all subjects
   For each of the four conditions, two testing              experienced the same condition, and they
sessions were conducted, each of which con-                  were informed about this fact. The subjects
tained between 16 and 22 subjects and took                   were instructed to focus only on their own
approximately 50 min to complete (see                        materials and computer screens, and the
356                                    EVA M. KROCKOW et al.

experimenters checked that these rules were           Condition D (decreasing δ) it was 0.68. Hence,
followed at all times across all testing sessions.    in Condition C more than half of the games
   After completing the consent form, subjects        were terminated by the subjects, whereas in
were presented with detailed, animated                the other two treatment conditions with ran-
instructions on their computer screens. They          dom termination, only around a third of the
could work through the slides in their own            games were ended by either of the human
time, and were given the opportunity to ask           subjects.
questions in private. Then, they were asked to           Taking a closer look at Figure 3, the distribu-
fill in a short comprehension test. The experi-        tions of subjects’ exit moves show marked differ-
menters checked all responses and corrected           ences across treatment conditions. Although in
any misunderstandings. Subsequently, the              Condition A (no random termination) more
experiment was started. The computer ran-             than 50% of the games were stopped after the
domly assigned all subjects to a player role in       20th exit point, not a single game in the other
which they remained for the entire testing ses-       treatment conditions was stopped after the 20th
sion. The subjects were ignorant of the identity      exit point. In Condition B (constant δ), games
of their co-players, and they were randomly re-       stopped by subjects followed a near normal dis-
paired after each game round (i.e., after each        tribution, with most game exits occurring at the
game they completed). The re-pairing of               third or fourth decision node and no game con-
players was randomized with replacement,              tinuing beyond the eighth decision node. In
meaning that the ideal of perfect stranger            Condition C (increasing δ), the pattern also
matching (i.e., never encountering the same           resembled a bell-shaped distribution but the dis-
co-player twice) was not achieved. However,           persion was larger. Most subjects exited this
given the relatively large size of our testing ses-   treatment condition at Node 6, but some games
sions (compared to other CG research includ-          continued for longer, with 19 being the latest
ing Rapoport, Stein, Parco, & Nicholas, 2003),        exit point reached. Finally, the exit distribution
we do not believe this to be a problem. The           of Condition D (decreasing δ), showed an
web application provided them with real-time          almost linear decrease across exit points. The
feedback about all the moves made and on the          majority of games (40%) that were exited by
outcome of each game. Once each subject had           human subjects stopped at Node 1, 30%
completed 20 rounds of Centipede games,               stopped at Node 2, 20% stopped at Node 3, and
one subject was drawn at random for the lot-          the final 10% stopped at Nodes 4, 5, 6 and
tery prize. The winner received his or her out-       7. Interestingly, the exit distributions described
come (in pounds sterling) of one randomly             above follow the probability function of game
selected game which they completed during             terminations by the computer. In Condition A
the session.                                          with zero possibility of computer termination
                                                      throughout the game, subjects’ defection levels
                                                      remain very low across many decision nodes
Results
                                                      before suddenly spiking close to the game’s
   The proportion of games ending at each             end. In Conditions B, C, and D, which were
exit node for the different conditions is shown       characterized by high game termination proba-
in Figures 3 and 4. Figure 3 displays the pro-        bilities in the beginning, a much higher per-
portions of games terminated by human                 centage of games were stopped at early exit
players, and plots these results against the          nodes by the subjects. Particularly Condition D
probability functions of random computer ter-         (decreasing δ) shows a close match between the
mination. Figure 4 omits the probability func-        subjects’ exit distributions and the computers’
tions, and shows the computer’s actual game           linearly decreasing termination probabilities.
terminations instead. For examples of individ-           The overview of mean exit points is comple-
ual behavior, please see the Appendix.                mented by the display of players’ conditional
   As can be seen in Figure 4, a large propor-        STOP probabilities at each node (see Fig. 5),
tion of games in the treatment conditions with        showing percentages of individuals who
random computer stopping were in fact termi-          reached each decision node and decided to
nated by the computer. In Condition B (con-           defect at that node. In Condition A
stant δ) this proportion amounted to 0.65, in         (no random termination), STOP probabilities
Condition C (increasing δ) it was 0.49, and in        are very low until Node 21, from which point
RANDOM GAME TERMINATION                                                   357

   Fig. 4. Total exit percentages in the experiment. Graphs show the percentages of experimental games that were ter-
minated at each of the 25 exit nodes in our Centipede games. The black bars represent the percentages of games
stopped by experimental subjects. The grey bars represent the percentages of games ended by a computer move. Graphs
A–D correspond to the four conditions with different types of random computer termination.

they steadily increase toward a mode of 100%                Condition D (decreasing δ), a small bell-curve
at Node 25. In Condition B (constant δ),                    of STOP probabilities was found: Starting with
STOP probabilities are below 10% on Node                    a percentage of approximately 10% at Node
1, but increase almost steadily until Node                  1, STOP probabilities rise to almost 30% at
7, beyond which no game in this condition                   Node 5 and then begin to fall again.
continued: The modal STOP probability was                      A Kruskal-Wallis H test was conducted to
above 40% at Node 6. In Condition C                         compare the normalized cooperation rates
(increasing δ), most STOP probabilities of sub-             (i.e., the proportion of GO moves per total
jects stayed below 20%, and the modal STOP                  moves) per subject across conditions. Signifi-
probability was found at Node 19, where a                   cant differences were found, χ 2(3) = 14.95,
third of all subjects stopped. Finally, in                  p < .005, with a mean rank cooperation rate of
358                                         EVA M. KROCKOW et al.

  Fig. 5. Subjects’ STOP probabilities at each of the 24 decision nodes. Based on the experimental results, the graphs
display calculated conditional probabilities (in percentages) of a subject choosing “STOP” assuming that they have
reached the respective decision point. Graphs A–D correspond to the four conditions with different rules for random
computer termination.

89.40 for Condition A, 84.49 for Condition C,               30.12 (decreasing δ) (U = 429, p < .05, r = .32).
59.87 for Condition D, and 59.85 for Condi-                 Furthermore, Condition C (increasing δ) with a
tion B (for mean cooperation rates see also                 mean rank of 44.18 was found to have a signifi-
Table 2). Pairwise comparisons using Mann–                  cantly higher cooperation rate than Condition
Whitney U tests showed that Condition A                     B (constant δ) with a mean rank of 29.65
(no random termination) with a mean rank of                 (U = 413, p < .005, r = .34). Condition C also
43.95 had a significantly higher cooperation                 had a significantly higher cooperation rate with
rate than Condition B (constant δ) with a                   a mean rank of 42.99 than Condition D
mean rank of 29.91 (U = 422, p < .005,                      (decreasing δ) with a mean rank of 31.04
r = .33). Condition A also had a significantly               (U = 460.5, p < .05, r = .28).
higher cooperation rate with a mean rank of                   The mean percentages of GO moves per
43.78 than Condition D with a mean rank of                  game round for all four conditions are
RANDOM GAME TERMINATION                                           359

displayed in Figure 6. Only the graphs of Condi-       rounds and suggesting that no learning took
tion A (no random termination) and Condition           place.
C (increasing δ) show discernible temporal
trends, indicating an increase of cooperation
over rounds. In Condition A, the mean percent-                               Discussion
age of GO moves increased from a value of
approximately 89% in Round 1 to a value of                This experiment aimed to extend previous
approximately 96% in Round 20. Time series             research on repeated games with random ter-
analyses confirmed the learning pattern appar-          mination rules by providing the first investiga-
                                                       tion of CGs with varying termination rules and
ent in Condition A. The SPSS Expert Modeler
                                                       long decision sequences. In particular, we
identified an exponential smoothing Holt linear
                                                       used 24-node finite-horizon games and tested
trend model with parameters of α (level
                                                       for effects of different rules of random com-
smoother) = 0.20 and γ (trend smoother) =              puter termination (no random termination,
1.00, indicating a linearly increasing score pat-      constant, increasing, and decreasing termina-
tern. The stationary R2 model fit statistic was cal-    tion probability) on human cooperation levels.
culated to estimate the model’s goodness of fit.        All treatment conditions with random com-
With an R2 value of .75, the model can explain         puter termination were controlled for average
approximately 75% of the variance in the data          termination probability across the 24 decision
and indicates a superior fit compared to a sim-         nodes (the mean probability was 1/4 for each
ple mean model used as a baseline for compari-         condition). However, the conditions varied
son. Additionally, the Ljung-Box statistic Q was       regarding their expected computer termina-
calculated to test whether the model was cor-          tion points, ranging from TD = 2.13 to TC =
rectly specified. The value of Q(16) = 18.38,           8.99. Our results revealed large differences
(p = .302) showed that no significant temporal          between the four treatment conditions, with
structure in the data set was unaccounted for by       subjects’ mean exit points varying across con-
the Holt linear model identified.                       ditions. Condition A (no random termination)
   In Condition C, the mean percentage of              yielded significantly higher mean exit points
GO moves increased from a value of approxi-            than Condition C (increasing δ), and both of
mately 80% in Round 1 to values above 90%              these conditions yielded significantly higher
in later rounds. Again, time series analyses           means than Conditions B (constant δ) and D
identified an exponential smoothing Holt lin-           (decreasing δ). Matching the subjects’ mean
ear trend model with parameters of α (level            exit points with the respective expected game
smoother) = 0.11 and γ (trend smoother) =              lengths (as based on the random computer
2.281E–6, indicating a linearly increasing score       termination rules), the values of mean exit
pattern. With a stationary R2 value of .72, the        points follow the same order as the values of
model can explain approximately 72% of the             the expected game length. More specifically,
variance of the data. Additionally, the Ljung-         games with a higher expected game length
Box statistic Q was calculated; the value of Q         were stopped later than those with a lower
(16) = 12.34, (p = .72) showed that no signifi-         expected game length. Additionally, inspec-
cant temporal structure in the data set was            tion of results showed a close match between
                                                       the percentages of subjects’ exit moves per
unaccounted for by our model.                          decision node and the random termination
   Conditions B (constant δ) and D (decreas-           probability associated with the respective
ing δ) did not show any temporal trends. For           node. This finding is in line with our hypothe-
both conditions, the SPSS Expert Modeler               ses, and it supports previous experimental
identified ARIMA (0,0,0), a model indicating            results (e.g., Dal Bó, 2005; Roth & Mur-
nothing but white noise in the data across             nighan, 1978).

                                                  Table 2
                                 Expected game length and cooperation rate

Condition                      No Termination           Constant δ           Increasing δ   Decreasing δ

Expected game length T            24.00                 4.00                  8.99           2.13
Cooperation rate, M (SD)            .92 (.10)            .86 (.10)             .92 (.06)      .80 (.22)
360                                         EVA M. KROCKOW et al.

  Fig. 6. Mean cooperation rates (percentage of GO moves) for each of the 20 game rounds. Graphs A–D correspond
to the four conditions with different types of random computer termination. Black lines show the observed values (i.e.,
the data obtained experimentally). Dotted lines show the fit line indicating the temporal data trend.

  Interestingly, however, the decrease of the                example, although Condition A’s expected game
mean exit points was less severe than what could             length of 24 nodes was 12 times higher than the
have been expected from the drastic decrease of              expected game length of Condition D (2 nodes),
expected game length across conditions. For                  the mean exit point of subjects in Condition A
RANDOM GAME TERMINATION                                         361

was only 7.07 times higher than in Condition        both the expected game length and the com-
D. This indicates that cooperativeness did not      puter’s termination rules across conditions.
increase proportionately with the expected          Based on the present design, it is not possible
length of the games.                                to be certain of the reasons for differences in
   Indeed, the comparison of subjects’ cooper-      the cooperation rates across the different
ation rates across treatment conditions con-        games, but we believe that they are jointly
firmed this finding. Cooperation rates were           influenced by expected game length and ter-
surprisingly high across all conditions, with       mination rules. Future research could extend
98% of subjects choosing GO more than half          this study by controlling treatment conditions
of the time, and more than 10% always choos-        for the expected game length (rather than the
ing GO. Significant differences in cooperation       mean termination probability), while compar-
rates between conditions became apparent,           ing different termination rules. Additionally, it
but these differences did not follow the data       is possible that an increase in stimulus control
patterns previously identified when using            could be achieved by announcing the com-
mean exit points as dependent variable in the       puter’s termination probabilities at each stage
analyses. Condition A (no random termina-           of the game.
tion) and Condition C (increasing δ) yielded           When examining temporal data trends, it
comparable mean cooperation rates of                appears that learning occurred only in the treat-
approximately .92. Condition B (constant δ)         ment conditions with longer expected game
produced a mean rate of approximately .86,          lengths and either no random game termina-
and Condition D (decreasing δ) generated the        tion or increasing probability of termination. In
lowest cooperation rates (.80). However, due        the standard 24-node game, cooperation rates
to comparatively high variances within groups,      increased linearly with increasing experience in
the only significant differences were found          the game, reaching very high rates of over 95%
between Condition D on the one hand and             in the final game rounds. Hence, learning
Conditions A and C on the other hand, indi-         occurred in the opposite direction of equilib-
cating that only Condition D, with the lowest       rium play. Similarly, in the condition with
expected game length TD = 2.13, resulted in a       increasing termination probabilities, initial
significant decrease in subjects’ cooperative-       cooperation rates started at 83.3% and many
ness compared to the control condition with-        reached percentages higher than 90 toward the
out random termination.                             final game rounds. This is an interesting find-
   An explanation for the large variances within    ing, as the majority of experimental CG investi-
groups could be the importance of individual        gations reported decreases in cooperation over
differences influencing cooperation rates.           rounds (e.g., McKelvey & Palfrey, 1992; Rapo-
Although the treatment condition had an             port et al., 2003). Our learning effects could be
impact on behavior, other-regarding behavioral      explained by the linear payoff function and
propensities (e.g., cooperative social value ori-   comparatively low risk associated with each GO
entations) may have accounted for some of the       move in Condition A of the present study.
variance (e.g., Krockow et al., 2016b; Pulford,     Another reason may be the greater game
Krockow, Colman, & Lawrence, 2016). Addi-           length, which offers more opportunities for
tionally, numeracy skills could have had an         reciprocal cooperation (Krockow et al., 2016a).
impact on decision making. The disproportion-          Taken together, the findings suggest that CGs
ally large number of cooperative choices in con-    with far and finite horizons and linearly increas-
ditions with shorter expected game lengths          ing payoff functions generate high levels of
could be explained by the subjects’ inability to    cooperation that increase with higher experi-
anticipate likely computer exit points from the     ence in the game. When these games are com-
termination probabilities. In future investiga-     bined with different rules of random game
tions, any confounding effects of numeracy and      termination by the computer, the subjects’
mathematical ability could be reduced by            mean exit points typically decrease. However,
informing subjects about the expected game          subjects’ cooperativeness as assessed by the
length of their condition before the start of       more accurate measure of cooperation rates
each experiment.                                    may be affected only in conditions with very
   A limitation of the present study’s research     extreme conditions such as very low expected
design concerns the simultaneous changes to         game lengths. In this experiment, only
362                                           EVA M. KROCKOW et al.

Condition D, with decreasing termination prob-                 Binmore, K. G. (1998). Game theory and the social contract:
ability and an expected game length of approxi-                     Just playing (Vol. 2). Cambridge, MA: MIT press.
                                                               Bolle, F. (1990). High reward experiments without high
mately two decision nodes, led to a significant                      expenditure for the experimenter. Journal of Economic
decrease in cooperativeness relative to the con-                    Psychology,11(2), 157–167. https://doi.org/10.1016/
trol condition. Future research should investi-                     0167-4870(90)90001-P
gate the effects that individual differences may               Bornstein, G., Kugler, T., & Ziegelmeyer, A. (2004). Indi-
have on cooperation levels in CGs and RPDGs                         vidual and group decisions in the Centipede game:
                                                                    Are groups more “rational” players? Journal of Experi-
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ables to investigate could be social value orienta-                 org/10.1016/j.jesp.2003.11.003
tion and general numeracy skills. To increase                  Cerutti, D. T. (1989). Discrimination theory of rule-
external validity of the current study design fur-                  governed behavior. Journal of the Experimental Analysis
ther, follow-up research could dispense with the                    of Behavior, 51(2), 259–276. https://doi.org/10.1901/
                                                                    jeab.1989.51-259
formal rules communicated to experimental                      Colman, A. M., Krockow, E. M., Frosch, C. A., &
subjects, because many real-life choices with                       Pulford, B. D. (2016). Rationality and backward
probabilistic consequences are not presented                        induction in Centipede games. In N. Galbraith,
with explicit probabilities. We tend instead in                     E. Lucas, & D. E. Over (Eds.), The thinking mind: A
                                                                    Festschrift for Ken Manktelow (pp. 139–150). London:
some situations to adapt our behavior to proba-                     Routledge.
bilities through learning. An experiment with                  Colman, A. M., & Pulford, B. D. (2015). Psychology of
learned instead of explicit probabilities, would                    game playing: Introduction to a special issue. Games,
shift the experimental focus from rule-governed                     6(4), 677–684. https://doi.org/10.3390/g6040677
behavior (or instructional control) to a focus on              Cubitt, R., Starmer, C., & Sugden, R. (1998). On the valid-
contingency-shaped behavior (learned behav-                         ity of the random lottery incentive system. Experimental
                                                                    Economics, 1(2), 115–131. https://doi.org/10.1007/
ior) (e.g., Cerutti, 1989), which could corre-                      BF01669298
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different baby-sitting scenarios presented in                       14434
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Appendix

                                         Condition A, Participant ID 118, Player role 2
                               25
                  Exit point

                               20
                               15
                               10
                                5
                                0
                                    1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
                                                    Game round
                               25        Condition A, Participant ID 505, Player role 2
                 Exit point

                               20
                               15
                               10
                                5
                                0
                                    1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
                                                    Game round
                               25          Condition C, Participant ID 207, Player role 1
                 Exit point

                               20
                               15
                               10
                                5
                                0
                                    1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
                                                    Game round
                               25
                                          Condition D, Participant ID 811, Player role 1
                 Exit point

                               20
                               15
                               10
                                5
                                0
                                    1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
                                                    Game round
  Fig. A1. Examples of individual participant behavior. For each condition, decisions of one representative participant
displaying typical behavior for that condition is shown. The exit points of these participants are displayed across the 20
game rounds. Those games terminated by the individual participant are marked by black circular shapes. Those games
terminated by the other participant are marked by circular shapes with the letter “O”. Those games terminated by the
computer (only applicable in Conditions B, C, and D) are marked by a square shapes with the letter “C”.
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