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Cooperation in an Overlapping Generations Experiment Author info | Abstract | Publisher info | Download info | Related research | Statistics Theo Offerman () (University of Amsterdam)
Jan Potters and Harry A.A. Verbon (Tilburg University)
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Recent theoretical work shows that folk theorems can be developed for infinite overlapping generations games. Cooperation in such games can be sustained as a Nash equilibrium. Besides the efficient cooperative equilibrium there is also the inefficient non-cooperative equilibrium. This paper investigates experimentally whether cooperation actually occurs in a simple overlapping generations game. Subjects both play the game and formulate full strategies. In our base-line treatment subjects fail to exploit the intertemporal structure of the game. When we provide subjects with a recommendation to play a (subgame perfect) grim trigger strategy, a substantial part of the population develops trigger-like strategies. However, a remaining group of unconditional defectors prevents the cooperative outcome to evolve.
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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number
99-019/1.
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Date of creation: 09 Mar 1999Date of revision:
Handle: RePEc:dgr:uvatin:19990019Contact details of provider: Web page: http://www.tinbergen.nl/
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Keywords: overlapping generations ; cooperation ; trigger strategies ; experiments ; Other versions of this item:
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior D90 - Microeconomics - - Intertemporal Choice and Growth - - - General
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