Time Horizons in Interdependent Security David J. Hardisty, Howard Kunreuther, David H. Krantz, & Poonam Arora Columbia University & University of Pennsylvania. Confirming H2, solo players showed the same pattern as IDS players:. Abstract. Methods.
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Time Horizons in Interdependent SecurityDavid J. Hardisty, Howard Kunreuther, David H. Krantz, & Poonam AroraColumbia University & University of Pennsylvania
Confirming H2, solo players showed the same pattern as IDS players:
Many real-world social dilemmas require interdependent players to protect against a large loss that has a low annual probability of occurring. Examples include protecting against terrorism (shared border security), protecting against disease outbreak (think of bird flu), or climate change. Decisions on whether to invest in protection may be made year by year, or investment may be precommitted for a number of years. Normally, when an outcome is delayed, the subjective uncertainty goes up. However, we hypothesized and found that with recurring low probability events, increasing the time horizon would increase the subjective probability and thus (paradoxically) increase investment rates.
Interdependent Security (IDS) Payoff Matrix
In the (deterministic) prisoner’s dilemma, precommitment lowered investment:
Prisoner’s Dilemma (PD)
Replicating previous research, investment rates were lower in IDS than in PD. Confirming H1, investment rates in the IDS game increased with precommitment:
Kunreuther, H., Silvasi, G., Bradlow, E., & Small, D. (2009). Bayesian analysis of deterministic and stochastic prisoner’s dilemma games. Judgment and Decision Making, 4(5), 363-384.
Weber, B. J. & Chapman, G. B. (2005). The combined effects of risk and time on choice: Does uncertainty eliminate the immediacy effect? Does delay eliminate the certainty effect? Organizational Behavior and Human Decision Processes, 96, 104-118.
Contact: [email protected], http://davidhardisty.info
Support: NSF grants SES-0345840 and SES-0820496