Strategic donation as a signal of cooperation intention: a laboratory experiment

Abstract

We hypothesised that people and companies non-anonymously donate to signal their intention to cooperate with observers; consequently, non-anonymous donation works as a coordination device between donors and observers. To test this, we conducted a laboratory experiment where a participant ('donor') determined how much to give to another participant and then played a repeated prisoner's dilemma game with a different participant ('third party'). Our hypothesis was supported by the findings that donors correlated their cooperation rate with their giving amount only when the amount was visible to a third party and, mediated by this amount, donors' and third-parties' cooperation rates correlated.