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Cooperation in Experimental Games of Strategic Complements and Substitutes

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  • Jan Potters
  • Sigrid Suetens

Abstract

We conduct a laboratory experiment aimed at examining whether strategic substitutability and strategic complementarity have an impact on the tendency to cooperate in finitely repeated two-player games with a Pareto-inefficient Nash equilibrium. We find that there is significantly more cooperation when actions exhibit strategic complementarities than in the case of strategic substitutes. The difference is to some extent driven by a difference in the speed with which some pairs reach stable full cooperation, but mainly by differences in choices of pairs that do not succeed in reaching full cooperation. Copyright , Wiley-Blackwell.

Suggested Citation

  • Jan Potters & Sigrid Suetens, 2009. "Cooperation in Experimental Games of Strategic Complements and Substitutes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(3), pages 1125-1147.
    • Handle: RePEc:oup:restud:v:76:y:2009:i:3:p:1125-1147
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    File URL: http://hdl.handle.net/10.1111/j.1467-937X.2009.00548.x
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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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