The breakdown of cooperation in iterative real-time trust dilemmas
We study a class of trust-based cooperation dilemmas that evolve in continuous time. Characteristic of these dilemmas is that as long as all n players continue to cooperate, their payoffs increase monotonically over time. Simultaneously, the temptation to defect increases too, as the first player to defect terminates the interaction and receives the present value of the payoff function whereas each of the other nâˆ’1 players only receives a proportion Î´ (0 > Î´ > 1) of the defecting playerâ€™s payoff. We introduce a novel experimental institution that we call the Real-Time Trust Game (RTTG) to examine this class of interactions. We then report the results from an iterated RTTG in which the values of n and Î´ are varied in a between-subjects design. In all conditions, cooperation breaks down in the population over iterations of the game. The rate of breakdown sharply increases as n increases and more slowly decreases as Î´ increases. Copyright Economic Science Association 2006
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Güth, W. & Kliemt, H., 1993.
"Competition or Co-Operation,"
1993-39, Tilburg University, Center for Economic Research.
- Aumann, Robert J., 1995. "Backward induction and common knowledge of rationality," Games and Economic Behavior, Elsevier, vol. 8(1), pages 6-19.
- Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
- Jim Engle-Warnick & Robert L. Slonim, 2001.
"The Fragility and Robustness of Trust,"
Economics Series Working Papers
2001-W15, University of Oxford, Department of Economics.
- Guth, Werner & Ockenfels, Peter & Wendel, Markus, 1997. "Cooperation based on trust. An experimental investigation," Journal of Economic Psychology, Elsevier, vol. 18(1), pages 15-43, February.
- Reny Philip J., 1993.
"Common Belief and the Theory of Games with Perfect Information,"
Journal of Economic Theory,
Elsevier, vol. 59(2), pages 257-274, April.
- P. Reny, 2010. "Common Belief and the Theory of Games with Perfect Information," Levine's Working Paper Archive 386, David K. Levine.
- Burnham, Terence & McCabe, Kevin & Smith, Vernon L., 2000. "Friend-or-foe intentionality priming in an extensive form trust game," Journal of Economic Behavior & Organization, Elsevier, vol. 43(1), pages 57-73, September.
- Camerer, Colin & Weigelt, Keith, 1988. "Experimental Tests of a Sequential Equilibrium Reputation Model," Econometrica, Econometric Society, vol. 56(1), pages 1-36, January.
- McKelvey, Richard D & Palfrey, Thomas R, 1992. "An Experimental Study of the Centipede Game," Econometrica, Econometric Society, vol. 60(4), pages 803-36, July.
When requesting a correction, please mention this item's handle: RePEc:kap:expeco:v:9:y:2006:i:2:p:147-166. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.