Our results suggest that individuals in a more positive mood are less likely to cooperate, and play less efficiently in a repeated Prisoner’s Dilemma

Happiness, cooperation and language. Eugenio Proto, Daniel Sgroi, Mahnaz Nazneen. Journal of Economic Behavior & Organization, November 6 2019. https://doi.org/10.1016/j.jebo.2019.10.006

Abstract: According to existing research across several disciplines (management, psychology, economics and neuroscience), positive mood can have positive effects, engendering more altruistic, open and helpful behaviour, but can also work through a more negative channel by inducing inward-orientation, assertiveness, and reduced use of information. This leaves the impact on cooperation in interactive and strategic situations unclear. We find evidence from 490 participants in a laboratory experiment suggesting that participants in an induced positive mood cooperate less in a repeated Prisoner’s Dilemma than participants in a neutral setting. This is robust to the number of repetitions or the inclusion of pre-play communication. In order to understand why positive mood might damage the propensity to cooperate, we conduct a language analysis of the pre-play communication between players. This analysis indicates that subjects in a more positive mood use more inward-oriented and more negative language.

Keywords: Positive moodAffectHappinessMood induction proceduresCooperationRepeated Prisoner’s DilemmaSocial preferencesSocial dilemmasCognitive skillsProductivityInward-orientationLanguage analysis

JEL classification: C72 (Cooperative games)C91 (Laboratory experiments)D91 (Role and effects of psychologicalemotionalsocialand cognitive factors on decision making)J24 (Productivity)J28 (Life satisfaction)


---
In a previous version:

5 Concluding Remarks

Our results suggest that individuals in a more positive mood are less likely to cooperate, and play less efficiently in a repeated Prisoner’s Dilemma. This supports what we described as the “negative channel” in the introduction, and suggests that this channel dominates the “positive channel” in a situation involving repeated play and strategic interaction. This is true both for the repeated Prisoner’s Dilemma with a known and unknown end date and for sessions both with and without pre-play communication. We also show that the result is not specific to a particular form of mood induction. The result holds right through to the final round of play, though it does not hold if we analyse only the very first round of each supergame.

A novel analysis of the text used in pre-play communication, to our knowledge the first of its kind in an economics laboratory experiment, suggests that those in a more positive mood use more negative language and display greater inward-orientation (through the greater use of the “I” pronoun) than those in a neutral mood which also supports the “negative channel”. We confirm that inward orientation is not specific to any one form of mood induction (it applies equally well to the use of movie clips or Velten statements and music) an our language analysis is. Our findings also support the concept of “mood maintenance” which explains why those with a higher level of happiness might shy away from the risks involved in cooperation: they have more to lose and less to gain compared to those at lower levels of happiness: this is most apparent when looking at the choice of defect where positive mood is associated with a 7.2 percentage point reduction (p-value 0.0232) in the cooperation. These findings are very different from results in the literature typically obtained in oneshot games or which do not involve strategic interaction. A simple explanation (supported by Proto et al. (2017)) is that repeated-interaction games involve more complex tasks where cognitive ability plays a crucial role.

Taken together with one of the key findings in the “negative channel” described earlier, that cognitive ability may be negatively related to positive mood, this might explain why subjects in a neutral mood are better equipped for more complex strategic settings. Finally, we should note that in our study we were specifically interested in the impact of general positive or neutral mood shocks and so elected to have everyone within a session face the same shock. Randomization then occurred across sessions not within sessions. This works well if we wish to consider a situation where everyone faces the same shock. Our work is not well-placed to study situations where individuals face different shocks and in judging how these might interact, for instance if one player has recently become happier while another has not. This is a potential topic for future study.