Compete, coordinate, and cooperate: How to exploit uncertain environments with social interaction.

Countless decisions, from the trivial to the crucial, are made in complex social contexts while facing uncertain consequences. Yet a large portion of decision making research focuses on either the effects of social interaction or the effects of environmental uncertainty by examining strategic games against others or individual games against nature. Drawing a connection between these approaches, the authors extend a standard individual choice paradigm to include social interaction with 1 other person. In this paradigm, 2 competing decision makers repeatedly select among 2 options, each offering a particular probability of a fixed payoff. When both players choose the same, correct option, the payoff is evenly split; when they choose different options, the player choosing the correct option receives the full payoff. The addition of this social dimension gives players an opportunity to fully exploit an uncertain environment via cooperation: By consistently choosing opposite options, two players can exploit the uncertain environment more effectively than a single player could. We present 2 experiments that manipulate environmental (Experiment 1) and social (Experiment 2) aspects of the paradigm. In Experiment 1, the outcome probabilities were either known or unknown to participants; in Experiment 2, participants' attention was drawn to individual or group gains by introducing either within- or between-group competition. Efficient cooperation did not emerge spontaneously in Experiment 1. Instead, most people probability maximized, mirroring the behavior observed in individual choice. By contrast, between--group competition in Experiment 2 facilitated efficient-but not always equitable--exploitation of uncertain environments. This work links the concepts of individual risky choice and strategic decision making under both environmental and social uncertainty.