The robustness of the "Raise-The-Stakes” strategy: Coping with exploitation in noisy Prisoner's Dilemma Games

Recent models of altruism point out the success of a strategy called 'Raise-The-Stakes' (RTS) in situations allowing variability in cooperation. In theory, RTS is difficult to exploit because it begins with a small investment in an iterated Prisoner's Dilemma Game (PDG). When its cooperation is reciprocated, RTS increases its generosity, thereby taking advantage of cooperative opportunities. Previous research has shown that human participants indeed adopt RTS but start out moderately cooperative rather than with a minimal investment. This raises the question how robust RTS is against exploitation, especially in a noisy situation. We investigate whether human participants vary their cooperation in interaction with reciprocators and cheaters in an iterated nondiscrete version of a PDG. When confronted with a strategy that matches the investment of the participant on the previous round, we find that participants are likely to increase cooperation. However, cooperation gradually breaks down in interaction with a strategy that undercuts the level of cooperation of the participants, indicating the robustness of RTS. In line with RTS modeling studies, but in contrast with the cheater detection literature, we find that human participants are less willing to increase cooperation when the perceived likelihood of mistakes increases.