Is a PD game still a dilemma for Japanese rural villagers? A field and laboratory comparison of the impact of social group membership on cooperation

Local norms and shared beliefs in cohesive social groups regulate individual behavior in everyday economic life. I use a door-to-door field experiment where a hundred and twenty villagers recruited from twenty-three communities in a Japanese rural mountainous village play a simultaneous prisoner’s dilemma game. To examine whether a set of experiences shared through interactions among community members affect experimental behavior, I compare villagers’ behavior under in-community and out-community random matching protocols. I also report a counterpart laboratory experiment with seventy-two university student subjects to address the external validity of laboratory experiments. The findings are three-fold. First, almost full cooperation is achieved when villagers play a prisoner’s dilemma game with their anonymous community members. Second, cooperation is significantly higher within the in-group compared to the out-group treatment in both the laboratory and field experiments. Third, although a significant treatment effect of social group membership is preserved, a big difference in the average cooperation rates is observed between the laboratory and field.