Cooperation in an Overlapping Generations Experiment
AbstractRecent theoretical work shows that folk theorems can be developed for infiniteoverlapping generations games. Cooperation in such games can be sustained as aNash equilibrium. Besides the efficient cooperative equilibrium there is alsothe inefficient non-cooperative equilibrium. This paper investigatesexperimentally whether cooperation actually occurs in a simple overlappinggenerations game. Subjects both play the game and formulate full strategies. Inour base-line treatment subjects fail to exploit the intertemporal structure ofthe game. When we provide subjects with a recommendation to play a (subgameperfect) grim trigger strategy, a substantial part of the population developstrigger-like strategies. However, a remaining group of unconditional defectorsprevents the cooperative outcome to evolve.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 99-019/1.
Date of creation: 09 Mar 1999
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overlapping generations; cooperation; trigger strategies; experiments;
Other versions of this item:
- Offerman, Theo & Potters, Jan & Verbon, Harrie A. A., 2001. "Cooperation in an Overlapping Generations Experiment," Games and Economic Behavior, Elsevier, vol. 36(2), pages 264-275, August.
- Offerman, T.J.S. & Potters, J.J.M. & Verbon, H.A.A., 2001. "Cooperation in an overlapping generations experiment," Open Access publications from Tilburg University urn:nbn:nl:ui:12-86814, Tilburg University.
- 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 - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-05-10 (All new papers)
- NEP-EXP-1999-05-10 (Experimental Economics)
- NEP-IND-1999-05-10 (Industrial Organization)
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