Voluntary Cooperation Based on Equilibrium Retribution - An Experiment Testing Finite-Horizon Folk Theorems
AbstractUnlike previous attempts to implement cooperation in a prisoners' dilemma game with an infinite horizon in the laboratory, we focus on extended prisoners' dilemma games in which a second (pure strategy) equilibrium allows for voluntary cooperation in all but the last round. Our four main experimental treatments distinguish long versus short horizon and strict versus non-strict additional equilibrium compared to the control treatment, a standard prisoners' dilemma. Quite surprisingly, according to our results, only a strict additional equilibrium increases cooperation rate for a given time horizon. As expected a longer time horizon promotes cooperation.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-030.
Date of creation: 21 Apr 2009
Date of revision:
Folk theorem; Finite horizon; Prisoners' dilemma; Experiment;
Find related papers by JEL classification:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-02 (All new papers)
- NEP-CBE-2009-05-02 (Cognitive & Behavioural Economics)
- NEP-EXP-2009-05-02 (Experimental Economics)
- NEP-GTH-2009-05-02 (Game Theory)
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- Lisa Bruttel & Werner Güth & Ulrich Kamecke, 2012. "Finitely repeated prisoners’ dilemma experiments without a commonly known end," International Journal of Game Theory, Springer, vol. 41(1), pages 23-47, February.
- Fabian Winter, 2013. "Fairness norms can explain the emergence of specific cooperation norms in the Battle of the Prisoners Dilemma," Jena Economic Research Papers 2013-016, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
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