Kindness begets kindness. How true and how relevant is this age old saying in our current society? If this act of “kindness” conceals a desire for something in return, does it void the initial premise since there is no “kindness” to begin with?
An Economics Experiment
Back in September, I participated in a paid economics experiment. Economics experiments count as one the activities I look forward to, one reason being that I get to battle test my self formulated predictions of human behavoir and the other reason is that I get paid to do that. So, the satisfaction is positively correlated in such as way that if my predictions are right, both objectives get fulfilled and vice versa.
Starting from my freshman year, I have participated in such experiments and earned an average of about $15-$18 each time. This highly depends on the generosity of the researcher conducting the experiment and the circumstances behind the session, much of it is out of my control. One particular researcher stands out from memory as his experiments are designed to be rather long winded and has a relatively low payout.
Background Settings
Each of these experiments are designed to test certain hypothesis in the various topics the researcher is studying. This topic is not disclosed to participants but from the way the questions are phrased and the actions available to us, it is not hard to guess what the topic is. I have done experiments involving the distribution of COE, combating fake news and organ donations.
These experiments are often presented in a story, this one revolves around a village of 6 chicken farmers in a turn based world where a hen gets granted to one lucky farmer each day. Each of these hens lays 2 eggs each day and dies after 5 days. The farmers get to choose at every turn whether to be a voter or be a candidate for an election. For the sake of this story, lets name the 6 farmers Tomato, Mango, Lettuce, Pepper, Pineapple and Starfruit. (Sidenote: Details of the experiment have started to fade and the exact number of players in a group is either 5 or 6. My brain leans towards 6 as the correct answer.)
| # | Name |
| 1 | Tomato (Me) |
| 2 | Mango |
| 3 | Lettuce |
| 4 | Pepper |
| 5 | Pineapple |
| 6 | Starfruit |
Suppose I were to run as a candidate, I will pledge the number of eggs I will gift to those that vote for me, subject to the availability of said eggs in my coop. The eggs represent the currency used in this experiment and this directly translates to actual cash in the real world. In other words, the voting system represents how much of an incentive I am willing to pledge to my voters to get them to vote for me instead of my competitors.
The curious thing about the election is that the winner is not determined by how many votes the candidate receives nor how many eggs is pledged but by random selection by the computer. So, I can pledge as many or as little eggs as I please and not influence the results. The only way of increasing my chances is to incentivise as many people to vote for me in order to raise the probability of me winning.
| Candidate | Eggs Pledged |
| Lettuce | 2 |
| Starfruit | 1 |
On the other hand, if I choose to be a voter, I can see the list of candidates and how much each candidate has pledged to the winner. I can vote for Lettuce, the candidate with the higher payout or I can vote for starfruit with the lower payout. The computer randomly chooses the winner and transfers the eggs pledged from the candidate to the voter. In a ideal world where every voter votes out of self interest (getting the most eggs), every voter will vote for lettuce to maximise their earnings and call it a day. However, this is an economics experiment and there is no fun in such a system.
In a situation where everybody choose to either be a farmer or a voter, the computer will randomly select one person to receive the hen. This ensures the continuity of the experiment. For the sake of transparency and to test the hypothesis, the results of each round will be shown to everyone (which voter voted for which candidate etc).
Progression of the Experiment
Right at the start, I made a blunder, thinking that I should attempt to get a hen as that would guarantee my income stream for the next 5 rounds. However, what I failed to realise was that as nobody had any hens nor eggs in their coop, the real power lies not in the candidate but in the voter. The voter gets to choose the candidate whilst the candidate has no leverage nor incentive to get the voter’s vote.
The majority of the other players probably made the same mistake as me (assuming that is indeed their strategy, if they had any to begin with). For the very first round, there were only 2 voters while the rest choose to be candidates. This meant that I had 33% chance of being chosen by a voter. Under an ideal situation, both voters will vote for me and thus the chance of getting a hen immediately goes to 100% for me. This is because the computer chooses a vote pair and both the votes go to me. However, things are seldom ideal and the hen did not go to me.
In the next round, I decided to be a voter and choose to vote for Mango, who was a voter in the previous round and cast the winning vote. I managed to cast the winning vote this time and Mango got a hen and I received a grand total of zero eggs in return. In the following round, I choose to be a candidate in the hopes that Mango will reciprocate the goodwill and vote for me. Of course, this is based on the assumption that Mango is fully aware of how the game should be played and does not resort to petty tricks to sabotage other players. As luck would have it, Mango played along with my predictions and a social contract is thus formed.
The game would go on for multiple rounds and the number of eggs accumulated would be the payout received. Mango and I will go on to dominate the experiment via our mutually beneficial social contract of taking turns to be the voter and candidate and voting for each other.We claimed over 66% of the total available eggs in circulation, when the expected average eggs a player gets is 17%. The experiment was done anonymously via a computer so no one knows who the other 5 players are and no communication is thus possible. The only way to get ahead in this game is by formulating sound theories sticking to them throughout the game.
Layman’s Interpretation of the Results
So how did Mango and I manage to win most of the hens and the eggs? This could perhaps be attributed to our understanding of the value of a social contract and our willingness to commit to it. Or it could well be down to dumb luck that we managed to establish one by the third round way before the other players were aware of this strategy.
Social Contract
I am an engineer by training, not an economist and hence I may not produce the best explanation nor use the most appropriate terms to describe an actual scenario. From my understanding, a social contract is a agreement formed between a person and another party, which could be an organisation, another person or a country. In this contract, both parties willingly give up some of their freedoms and autonomy in exchange for something much more.
For example, in the context of a society, we give up our right to bash the heads of those who offend us, allow ourselves to be policed and abide by a set of laws agreed amongst citizens in exchange for a peaceful coexistence between all parties. This arrangement makes everyone better off, which gives both parties an incentive to further commit to this social contract.
In the context of this experiment, an unspoken social contract is formed between Mango and I whereby we vote for each other and trust that the other party reciprocates. This arrangement is mutually beneficial, although the final say still lies with the computer’s choice of the winning vote.
Forming the Social Contract
After having cast the winning vote in the first round, Mango proceeded to be a candidate in the second round. The correct action for Pineapple, who won the first hen and 10 eggs over 5 turns, is to now become a voter and reciprocate the favor for Mango. This forms the basis of the social contract and failure to reciprocate voids the contract.
Unfortunately for Mango, Pineapple chose to be a candidate yet again, competing directly with Mango. There were not many voters, probably about 3 including myself. I choose to vote for Mango and the computer picked my vote as the winning vote. This is the first step in forming a social contract between me and Mango. From the actions of Mango in the second round, it is highly likely that Mango will reciprocate and vote for me in the third round. Only one way to find out.
For the third round, with Pineapple and Mango each having a hen each, they controlled the game for now and only they had the ability to pledge eggs for voters until a third player obtains an egg. I could play safe here and continue to be a voter in order to stand a chance to win some pledged eggs. However, successfully establishing a social contract pays off more so I chose to be a candidate and pledge a total of zero eggs for my voters. This is a risky move, aimed to capture the attention of Mango. To other voters, it is not in their best interest to vote for me instead of Pineapple or Mango (if they are a candidate) as I have no eggs to offer them.
When the results of the third round was announced, I got lucky again as Mango really did reciprocate and voted for me, which became the winning vote chosen by the computer. So now, the social contract between me and Mango has been formed. All we have to do is to honor the contract and pledge equal number of eggs each round. We will take turns to be a candidate or a voter and exclusively only vote for each other. Kind of like being in a monogamous marriage without cheating, as a reference to the Lovebird article in a separate post.
The mistake of Pineapple was that he got greedy and wanted to get another hen instead of reciprocating the favor to Mango. From Mango’s perspective, having failed to reciprocate, there was doubt on Pineapple’s trustworthiness. Throw in the fact that another player (me) have just voted for them, Mango most likely would attempt to establish a new social contract with me.
Unilaterally taking Advantage
Suppose a player takes advantage of the social contract and cheats the partner instead of both honoring the contract to the best of their abilities. Since the contract was established so both parties could benefit and the contract gains strength through mutual trust, the contract should cease to exist once one party fails to uphold their obligations.
If I expect Mango to continuously give me 2 eggs every other turn but I choose to give them 1 or 0, or even vote for other candidates when they offer better incentives, that would be hilariously unacceptable. I’m sure any other player would love to take my place in the social contract and get the eggs if I should attempt such short sighted maneuvers.
Similarly, in the context of society, if someone knowingly breaks the law (the social contract between the the citizen and the state), they have to face the consequence and accept the punishment accordingly. The contract cannot exist if the citizen receives protection from the law but doesn’t abide by the same rules themselves.
Controlling the Supply of Hens and Eggs
For the next few rounds, Mango and I alternated between voter and candidate as per the unspoken social contract. I felt pretty excited since the theory was correct and the results were showing. Occasionally, another player won a hen, which was out of our control, but most of them still went to either Mango or me.
Soon, we reached a point where no other player had any hens and thus, we have obtained total control of the game. No matter which player was a candidate, every other voter would choose to vote for us since we were the only ones with eggs and no other players could form a social contract successfully. One of them sure tried, but didn’t get reciprocated as the partners continued to try to be a candidate.
Fairness and Equality or Spite?
It was at this point where the optimum outcomes of garnering all the votes broke down. The other players started to vote for alternate candidates who offered zero eggs instead of voting for Mango and I who consistently offered 2 eggs every turn.
Perhaps they caught on to what we were doing and tried to replicate a social contract of their own. Or they wanted the distribution of eggs to be more fair between all the players. It is also possible that they were not pleased that Mango and I had dominated the game thus far and just wanted to spite us by voting for someone else. Pineapple fits the third description as this player didn’t vote for us any more. A temporary social contract between two other players was formed but broke down after a while.
As our social contract was under threat, I raised the stakes by offering 4 eggs instead of the usual 2 as I had 3 hens and could theoretically offer up to 6 whilst the other players had at most 1 hen. The logical voter would thus vote for me and try to win the 4 eggs. However, a voter who votes based on fairness or is fully out to spite me/Mango would not be tempted by the 4 eggs.
Unfortunately, although I did manage to get more votes, the winning vote did not go to Mango(my partner in the social contract). This outcome doesn’t invalidate the contract between Mango and I as both of us had honored our ends of the deal despite not receiving the benefits. Even if all the odds were not in our favor and we had zero hens between us, we should not break the contract and vote for other players as this would be an extremely short sighted move which has a lower chance of success compared to sticking to the existing social contract. All things revert to the mean in the long term so we will eventually get some hens again. Luckily enough, this situation never occurred so we did manage to ride our winning strategy all the way from the third turn to the 40th turn.
The Results
There were 270 eggs in circulation. Between the 6 players, each of us is expected to get 45 eggs on average. Due to the successful social contract between Mango and I, we managed to secure close to 180 eggs split almost evenly between us. This was much, much more than the third player and a little unfortunate for the last player who got less than 20 eggs. This represented a 66% sweep, which is fairly impressive to me.
What is peculiar is that the shady behavior of Pineapple got them more eggs than the last player who was more down to earth. There are definitely advantages to cheating but this is not something I would advocate in the real world because it will eventually come back to bite you sooner or later. Although the individual who performed the act of cheating benefited from it, the benefit came at someone’s expense and there is no overall gain to society.
Strategies
In situations such as the experiment detailed above, it is advantageous to form a social contract as soon as possible. Once it is formed, do not ever attempt to break it. On the condition that the other party breaks the contract, attempt to establish a new contract with another party.
To be continued…