Cooperative Equilibrium beyond Social Dilemmas: Pareto Solvable Games

Abstract: A recently introduced concept of "cooperative equilibrium", based on the assumption that players have a natural attitude to cooperation, has been proven a powerful tool in predicting human behaviour in social dilemmas. In this paper, we extend this idea to more general game models, termed "Pareto solvable" games, which in particular include the Nash Bargaining Problem and the Ultimatum Game. We show that games in this class possess a unique pure cooperative equilibrium. Furthermore, for the Ultimatum Game, this notion appears to be strongly correlated with a suitably defined variant of the Dictator Game. We support this observation with the results of a behavioural experiment conducted using Amazon Mechanical Turk, which demonstrates that our approach allows for making statistically precise predictions of average behaviour in such settings.