Unilateral commitments: A prisoner's dilemma perspective

We explore factors that influence successful outcomes in exchange relationships in the presence of unilateral cooperative agreements through the lenses of game theory, Transaction Cost Economics, and Social Exchange Theory. We further investigate the impact of commitment length with regard to strategic cooperation. Based on the results of a modified prisoner's dilemma experiment with 85 participants, we find that unilateral commitments of shorter duration successfully drive partner cooperative behavior both during the periods of commitment and after the unilateral commitment to cooperate has ended. However, when long-term commitments are made we find that there is a significant decrease in partner cooperation. Our findings provide guidance surrounding the risky decision to initiate a cooperative arrangement within an exchange. Based on the results we observed, it may be best for an organization to show good faith in initiating a commitment to cooperate, but to be conservative in doing so. Short duration commitments appear to achieve balance and promote optimal outcomes.

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