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A Continuous Dilemma

Author

Listed:
  • Daniel Friedman
  • Ryan Oprea

Abstract

We study prisoners' dilemmas played in continuous time with flow payoffs accumulated over 60 seconds. In most cases, the median rate of mutual cooperation is about 90 percent. Control sessions with repeated matchings over eight subperiods achieve less than half as much cooperation, and cooperation rates approach zero in one-shot sessions. In follow-up sessions with a variable number of subperiods, cooperation rates increase nearly linearly as the grid size decreases, and, with one-second subperiods, they approach continuous levels. Our data support a strand of theory that explains how capacity to respond rapidly stabilizes cooperation and destabilizes defection in the prisoner's dilemma. (JEL C72, C78, C91)

Suggested Citation

  • Daniel Friedman & Ryan Oprea, 2012. "A Continuous Dilemma," American Economic Review, American Economic Association, vol. 102(1), pages 337-363, February.
    • Handle: RePEc:aea:aecrev:v:102:y:2012:i:1:p:337-63
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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    1. A Continous Dilemma (AER 2012) in ReplicationWiki

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