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Cooperation in Partnerships: The Role of Breakups and Reputation

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Author Info

  • Ralph-C Bayer

    ()
    (School of Economics, University of Adelaide)

Abstract

We investigate experimentally if endogenous partnership formation can improve efficiency in social dilemma situations. Subjects play multiple two-player public goods games, where they can break up with their current partner after every fourth game. Subjects without a partner provide rankings of the available other singles regarding their preferred subject to be matched with. A stable marriage mechanism determines the new matches. We vary the information subjects have when they express their preferences for their future matches and also if staying in a partnership leads to a cost or a bonus. We find that endogenous group formation can increase efficiency. Both the provision of contribution history at the time of re-matching and bonuses for staying in a partnership have positive effects. At least one of the two positive factors has to be present for an efficiency improvement. The presence of both leads to the best results.

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File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp2011-22.pdf
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Bibliographic Info

Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2011-22.

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Length: 32 pages
Date of creation: Apr 2011
Date of revision:
Handle: RePEc:adl:wpaper:2011-22

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Related research

Keywords: Social Dilemma; Endogenous Group Formation; Public Goods;

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Cited by:
  1. Kenju Kamei & Louis Putterman, 2013. "Play it Again: Partner Choice, Reputation Building and Learning in Restarting, Finitely-Repeated Dilemma Games," Working Papers 2013-8, Brown University, Department of Economics.

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