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Co-operation and positive mood in the repeated prisoners dilemma.

Does mood matter for cooperation, and if so how? We address this issue in the laboratory by examining repeated play of the Prisoners’ Dilemma coupled with mood induction. We investigate not only whether mood matters but also how it interacts with ability to communicate, the role of beliefs and with both certainty and uncertainty in the number of repetitions. We find that players with an induced positive mood tend to cooperate less than players in a neutral mood setting. This difference is highest in settings with an uncertain number of repetitions and with no communication. We find that the difference is driven by both less accurate beliefs about partners’ choices and a less rational reaction to these beliefs among the players in the positive mood treatment. This interpretation of the data is corroborated by a systematic analysis of the text used during communication.