- 1 - Why Labels Affect Cooperation

Previous experiments document that subjects' behavior in a Prisoners' dilemma depends on the name that the experimenters give the game. Three competing hypotheses purport to explain such labeling effects. (i) The obedience hypothesis proposes that people instinctively try to behave appropriately, and that the label suggests which behavior is appropriate. (ii) The coordination hypothesis proposes that people tend to cooperate if they believe that others will do so, with labels serving as coordination devices. (iii) The social image hypothesis proposes that people respond to labels in order to signal their possession of the personality traits that the label emphasizes. The current study replicates the previous finding that subjects are more likely to cooperate when the experiment is called the Community Game than when it is called the Stock Market Game. However, we also find that this labeling effect vanishes when subjects play against an opponent who cannot control the own action, whether the opponent is informed about outcomes and labels or not. We can therefore reject some versions of all three hypotheses. Delicately context dependent norm obedience appears to be the most likely explanation. We propose a new experiment to test this hypothesis.