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Pledges of Commitment and Cooperation in Partnerships

Author

Listed:
  • Lachlan Deer

    (Department of Economics, University of Zurich, Schönberggasse 1, Zurich CH 8001, Switzerland)

  • Ralph-C. Bayer

    (School of Economics, University of Adelaide, Adelaide SA 5005, Australia)

Abstract

We use experimental methods to investigate whether pledges of commitment can improve cooperation in endogenously-formed partnerships facing a social dilemma. Treatments vary in terms of the individual’s: (1) opportunity to commit to their partner; (2) the cost of dissolving committed partnerships; and (3) the distribution of these dissolution costs between partners. Our findings show that pledges of commitment alone can increase cooperation and welfare in committed partnerships. The introduction of relatively large and equally split costs yields similar gains. In contrast, when costs to dissolve committed partnerships fall solely on the individual choosing to break up, pledges of commitment fail to improve cooperation and welfare.

Suggested Citation

  • Lachlan Deer & Ralph-C. Bayer, 2016. "Pledges of Commitment and Cooperation in Partnerships," Games, MDPI, vol. 7(1), pages 1-16, January.
    • Handle: RePEc:gam:jgames:v:7:y:2016:i:1:p:4-:d:62541
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    More about this item

    Keywords

    commitment; cooperation; endogenous group formation; experiment;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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