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Endogenous reputation formation under the shadow of the future

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  • Kamei, Kenju

Abstract

Recent research has shown that making people’s decisions known to others may enhance cooperation in infinitely repeated prisoner’s dilemma games with random matching. This paper experimentally studies whether people can cooperate with each other by endogenously showing their identities and building cooperative reputations when there is an option to hide the identities. Our experiment shows that a non-negligible fraction of subjects choose to conceal their identities and accordingly subjects fail to cooperate with each other in communities if hiding is cost-free. However, almost all subjects disclose their identities and successfully achieve cooperation if a cost is charged for the act of hiding. This finding has a broad methodological implication for the study of reputation mechanisms when infinitely repeated games are used in an experiment, as people’s behavior may be determined by their ability to hide identities.

Suggested Citation

  • Kamei, Kenju, 2017. "Endogenous reputation formation under the shadow of the future," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 189-204.
    • Handle: RePEc:eee:jeborg:v:142:y:2017:i:c:p:189-204
    DOI: 10.1016/j.jebo.2017.07.012
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    References listed on IDEAS

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    Cited by:

    1. Kenju Kamei, 2019. "Cooperation and endogenous repetition in an infinitely repeated social dilemma," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(3), pages 797-834, September.
    2. Ghidoni, Riccardo & Cleave, Blair L. & Suetens, Sigrid, 2019. "Perfect and imperfect strangers in social dilemmas," European Economic Review, Elsevier, vol. 116(C), pages 148-159.
    3. Kamei, Kenju, 2020. "Voluntary disclosure of information and cooperation in simultaneous-move economic interactions," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 234-246.
    4. Kamei, Kenju & Kobayashi, Hajime & Tse, Tiffany Tsz Kwan, 2022. "Observability of partners’ past play and cooperation: Experimental evidence," Economics Letters, Elsevier, vol. 210(C).
    5. Dorothée Honhon & Kyle Hyndman, 2020. "Flexibility and Reputation in Repeated Prisoner’s Dilemma Games," Management Science, INFORMS, vol. 66(11), pages 4998-5014, November.
    6. Kamei, Kenju, 2019. "Cooperation and Endogenous Repetition in an Infinitely Repeated Social Dilemma: Experimental Evidence," MPRA Paper 92097, University Library of Munich, Germany.
    7. Liu, Jia & Riyanto, Yohanes E. & Zhang, Ruike, 2020. "Firing the right bullets: Exploring the effectiveness of the hired-gun mechanism in the provision of public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 222-243.
    8. Kenju Kamei & Artem Nesterov, 2020. "Endogenous Monitoring through Gossiping in an Infinitely Repeated Prisoner’s Dilemma Game: Experimental Evidence," Working Papers 2020_02, Durham University Business School.
    9. Kamei, Kenju, 2020. "The Perverse Costly Signaling Effect on Cooperation under the Shadow of the Future," MPRA Paper 103678, University Library of Munich, Germany.

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    More about this item

    Keywords

    Experiment; Cooperation; Prisoner’s dilemma game; Infinitely repeated game; Reputation;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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