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The breakdown of cooperation in iterative real-time trust dilemmas

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  • Ryan Murphy
  • Amnon Rapoport
  • James Parco

Abstract

We study a class of trust-based cooperation dilemmas that evolve in continuous time. Characteristic of these dilemmas is that as long as all n players continue to cooperate, their payoffs increase monotonically over time. Simultaneously, the temptation to defect increases too, as the first player to defect terminates the interaction and receives the present value of the payoff function whereas each of the other n−1 players only receives a proportion δ (0 > δ > 1) of the defecting player’s payoff. We introduce a novel experimental institution that we call the Real-Time Trust Game (RTTG) to examine this class of interactions. We then report the results from an iterated RTTG in which the values of n and δ are varied in a between-subjects design. In all conditions, cooperation breaks down in the population over iterations of the game. The rate of breakdown sharply increases as n increases and more slowly decreases as δ increases. Copyright Economic Science Association 2006

Suggested Citation

  • Ryan Murphy & Amnon Rapoport & James Parco, 2006. "The breakdown of cooperation in iterative real-time trust dilemmas," Experimental Economics, Springer;Economic Science Association, vol. 9(2), pages 147-166, June.
    • Handle: RePEc:kap:expeco:v:9:y:2006:i:2:p:147-166
    DOI: 10.1007/s10683-006-7049-4
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    4. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    5. Dimitri Dubois & Marc Willinger, 2007. "The role of players’ identification in the population on the trusting and the trustworthy behavior an experimental investigation," Working Papers 07-06, LAMETA, Universtiy of Montpellier, revised Jun 2007.
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