Alternating or compensating? An experiment on the repeated sequential best shot game
AbstractIn the two-person sequential best shot game, first player 1 contributes to a public good and then player 2 is informed about this choice before contributing. The payoff from the public good is the same for both players and depends only on the maximal contribution. Efficient voluntary cooperation in the repeated best shot game therefore requires that only one player should contribute in a given round. To provide better chances for such cooperation, we enrich the sequential best shot base game by a third stage allowing the party with the lower contribution to transfer some of its periodic gain to the other party. Participants easily establish cooperation in the finitely repeated game. When cooperation evolves, it mostly takes the form of ''labor division'', with one participant constantly contributing and the other constantly compensating. However, in a treatment in which compensation is not possible, (more or less symmetric) alternating occurs frequently and turns out to be almost as efficient as labor division.
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Bibliographic InfoPaper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 86.
Date of creation: 2013
Date of revision:
best shot game; coordination; transfer; experiment;
Other versions of this item:
- Lisa Bruttel & Werner Güth, 2013. "Alternating or Compensating? An Experiment on the Repeated Sequential Best Shot Game," Working Paper Series of the Department of Economics, University of Konstanz 2013-24, Department of Economics, University of Konstanz.
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- 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-2013-11-16 (All new papers)
- NEP-CDM-2013-11-16 (Collective Decision-Making)
- NEP-EXP-2013-11-16 (Experimental Economics)
- NEP-GTH-2013-11-16 (Game Theory)
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