The Effect of Incentive Magnitude on Cooperation in the Prisoner's Dilemma Game

A basic Prisoners Dilemma matrix was multiplied by one cent, five cents, ten cents, or one hundred cents so as to alter the payoff magnitudes without affecting any of the ratios of values within the matrix. In addition to varying the amount of money at stake, we studied the effect of imaginary versus real money by comparing the situation in which real dollars were used with one in which imaginary dollars were employed. The results indicate that the subjects were more rather than less competitive when playing for real rather than imaginary dollars. No significant differences were obtained among the four real money conditions. These results question the assumption made by some investigators that it is the weak incentives employed in experimental games which lead to the relatively high degree of competition.