solution

In business, do nice guys finish first or last? Refer to the Nature (March 20, 2008) study of whether “nice guys finish last” in the business world, Exercise 2.125 (p. 131). Recall that college students repeatedly played a version of the game “prisoner’s dilemma,” where competitors choose cooperation, defection, or costly punishment. (Cooperation meant paying 1 unit for the opponent to receive 2 units, defection meant gaining 1 unit at a cost of 1 unit for the opponent, and punishment meant paying 1 unit for the opponent to lose 4 units.) At the conclusion of the games, the researchers recorded the average payoff and the number of times cooperation, defection, and punishment were used for each player. The scatterplots on p. 654 plot average payoff (y) against level of cooperation use, defection use, and punishment use, respectively.

a. Consider cooperation use (x) as a predictor of average payoff (y). Based on the scatterplot, is there evidence of a linear trend?

b. Consider defection use (x) as a predictor of average payoff (y). Based on the scatterplot, is there evidence of a linear trend?

c. Consider punishment use (x) as a predictor of average payoff (y). Based on the scatterplot (reproduced from Exercise 2.125), is there evidence of a linear trend?

d. Refer to part c. Is the slope of the line relating punishment use (x) to average payoff (y) positive or negative?

Exercise 2.125

In business, do nice guys really finish last? Do “nice guys finish last” in the competitive corporate world? In a study published in Nature (March 20, 2008), college students repeatedly played a version of the game “prisoner’s dilemma,” where competitors choose cooperation, defection, or costly punishment. (Cooperation meant paying 1 unit for the opponent to receive 2 units; defection meant gaining 1 unit at a cost of 1 unit for the opponent; and punishment meant paying 1 unit for the opponent to lose 4 units.) At the conclusion of the games, the researchers recorded the average payoff and the number of times punishment was used against each player. A graph of the data is shown in the accompanying scatterplot. Does it appear that average payoff is associated with punishment use? The researchers concluded that “winners don’t punish.” Do you agree? Explain.