This paper investigates how the possibility of affecting group composition combined with the possibility of repeated interaction impacts cooperation within groups and surplus distribution. We developed and tested experimentally a Surplus Allocation Game where cooperation of four agents is needed to produce surplus, but only two have the power to allocate it among the group members. Three matching procedures (corresponding to three separate experimental treatments) were used to test the impact of the variables of interest. A total of 400 subjects participated in our research, which was computer-based and conducted in a laboratory. Our results show that allowing for repeated interaction with the same partners leads to a self-selection of agents into groups with different life spans, whose duration is correlated with the behavior of both distributors and receivers. While behavior at the group level is diverse for surplus allocation and amount of cooperation, aggregate behavior is instead similar when repeated interaction is allowed or not allowed. We developed a behavioral model that captures the dynamics observed in the experimental data and sheds light into the rationales that drive the agents’ individual behavior, suggesting that the most generous distributors are those acting for fear of rejection, not for true generosity, while the groups lasting the longest are those composed by this type of distributors and “undemanding” receivers.
Bibliographical noteFunding Information:
Funding: This work was supported by the grants nr. 2461412 and nr. 31257234 from the Fondation de la Recherche Scientifique (FRS)–FNRS, the grant nr. G.0391.13N provided by Fonds voor Wetenschappelijk Onderzoek–FWO, and the grant nr. 0166-00005B of the “Danmarks Frie Forskningsfond”. None of the funding sources were involved in designing the study, in the collection, analysis, and interpretation of the data, in the writing of the report, in the decision to submit the article for publication.
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