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Accuracy and retaliation in repeated games with imperfect private monitoring: Experiments

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  • Kayaba, Yutaka
  • Matsushima, Hitoshi
  • Toyama, Tomohisa

Abstract

We experimentally examine repeated prisoner's dilemma with random termination, in which monitoring is imperfect and private. Our estimation indicates that a significant proportion of the subjects follows generous tit-for-tat strategies, which are stochastic extensions of tit-for-tat. However, the observed retaliating policies are inconsistent with the generous tit-for-tat equilibrium behavior. Showing inconsistent behavior, subjects with low accuracy do not tend to retaliate more than those with high accuracy. Furthermore, subjects with low accuracy tend to retaliate considerably with lesser strength than that predicted by the equilibrium theory, while subjects with high accuracy tend to retaliate with more strength than that predicted by the equilibrium theory, or with strength almost equivalent to it.

Suggested Citation

  • Kayaba, Yutaka & Matsushima, Hitoshi & Toyama, Tomohisa, 2020. "Accuracy and retaliation in repeated games with imperfect private monitoring: Experiments," Games and Economic Behavior, Elsevier, vol. 120(C), pages 193-208.
    • Handle: RePEc:eee:gamebe:v:120:y:2020:i:c:p:193-208
    DOI: 10.1016/j.geb.2019.12.003
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    Cited by:

    1. Evans, Alecia & Sesmero, Juan, 2022. "Cooperation in Social Dilemmas with Correlated Noisy Payoffs: Theory and Experimental Evidence," 2021 Annual Meeting, August 1-3, Austin, Texas 322804, Agricultural and Applied Economics Association.
    2. Matsushima Hitoshi, 2020. "Behavioral Theory of Repeated Prisoner’s Dilemma: Generous Tit-For-Tat Strategy," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 20(1), pages 1-11, January.
    3. Edoardo Gallo & Yohanes E. Riyanto & Nilanjan Roy & Tat-How Teh, 2022. "Cooperation and punishment mechanisms in uncertain and dynamic networks," Papers 2203.04001, arXiv.org.
    4. Kayaba, Yutaka & Matsushima, Hitoshi & Toyama, Tomohisa, 2020. "Accuracy and retaliation in repeated games with imperfect private monitoring: Experiments," Games and Economic Behavior, Elsevier, vol. 120(C), pages 193-208.
    5. Gallo, Edoardo & Riyanto, Yohanes E. & Roy, Nilanjan & Teh, Tat-How, 2022. "Cooperation and punishment mechanisms in uncertain and dynamic social networks," Games and Economic Behavior, Elsevier, vol. 134(C), pages 75-103.
    6. Sawa, Ryoji, 2021. "A stochastic stability analysis with observation errors in normal form games," Games and Economic Behavior, Elsevier, vol. 129(C), pages 570-589.
    7. Hitoshi Matsushima, 2019. "Behavioral Theory of Repeated Prisoner’s Dilemma: Generous Tit-For-Tat Strategy (Forthcoming in the B. E. Journal of Theoretical Economics)," CARF F-Series CARF-F-452, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    8. Yutaka Kayaba & Hitoshi Matsushima & Tomohisa Toyama, 2019. "Accuracy and Retaliation in Repeated Games with Imperfect Private Monitoring: Experiments (Revised version of CARF-F-433)," CARF F-Series CARF-F-466, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.

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    More about this item

    Keywords

    Repeated prisoner's dilemma; Imperfect private monitoring; Experiments; Generous tit-for-tat; Retaliation intensity;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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