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Cooperation among strangers: an experiment with indefinite interaction

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  • Gabriele Camera
  • Marco Casari

Abstract

We study the emergence of norms of cooperation in experimental economies populated by strangers interacting indefinitely and lacking formal enforcement institutions. In all treatments the efficient outcome is sustainable as an equilibrium. We address the following questions: can these economies achieve full efficiency? Which institutions for monitoring and enforcement promote cooperation? Finally, what classes of strategies are employed to achieve high efficiency? We find that, first, cooperation can be sustained even in anonymous settings; second, some type of monitoring and punishment institutions significantly promote cooperation; and, third, subjects dislike indiscriminate strategies and prefer selective strategies.

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Bibliographic Info

Paper provided by Purdue University, Department of Economics in its series Purdue University Economics Working Papers with number 1201.

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Length: 47 pages
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:pur:prukra:1201

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Keywords: experiments; repeated games; cooperation; equilibrium selection; prisoners’ dilemma; random matching;

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References

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Citations

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Cited by:
  1. Gabriele Camera & Marco Casari, 2009. "Cooperation among Strangers under the Shadow of the Future," American Economic Review, American Economic Association, American Economic Association, vol. 99(3), pages 979-1005, June.
  2. Stahl, Dale O., 2013. "An experimental test of the efficacy of a simple reputation mechanism to solve social dilemmas," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 94(C), pages 116-124.
  3. Sergio Sousa, 2010. "Cooperation and Punishment under Uncertain Enforcement," Discussion Papers, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham 2010-06, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.

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