It's the thought that counts: The role of intentions in reciprocal altruism *

This paper examines play in repeated interactions where intended actions are implemented with noise and intentions are perfectly observable, and compares it to play in cases where intentions are not observed. We find that the effect of directly observing intentions varies with the strategic incentives of the game: as theory predicts, observing intentions leads to more cooperation, especially if these observations support a cooperative equilibrium that would not otherwise be present. Moreover when there is a high return to cooperation, some subjects are tolerant, using intentions to forgive accidental defections while not punishing partners who meant to defect but cooperated by accident. Conversely, when there is a low return to cooperation, some subjects are punitive: outcomes are used to punish accidental defections, but accidental cooperation is not punished. Observing intentions leads subjects to use simpler lowermemory strategies; this suggests that the more complex cooperative strategies seen in games where intentions are not observable arise from an attempt to infer intentions.

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