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Waiting To Cooperate?

Author Info

  • Todd R. Kaplan

    ()

    (University of Exeter, University of Haifa)

  • Bradley J. Ruffle

    ()

    (Wilfrid Laurier University, Ben-Gurion University)

  • Ze’ev Shtudiner

    ()

    (Ariel University)

Abstract

Sometimes cooperation between two parties requires exactly one to cede to the other. If the decisions whether to cede are made simultaneously, then neither or both may acquiesce leading to an inefficient outcome. However, inefficiency may be avoided if a party can wait to see what the other does. We experimentally test whether adding a waiting option to such a two-player cooperation game enhances cooperation. Although subjects cede less overall with the waiting option, we show that they coordinate more and consequently achieve higher profits. Yet, a dark side overhangs waiting: the least cooperative pairs do worse with this option. They wait not to facilitate coordination but to disguise their entry.

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File URL: http://in.bgu.ac.il/en/humsos/Econ/Working/1314.pdf
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Paper provided by Ben-Gurion University of the Negev, Department of Economics in its series Working Papers with number 1314.

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Length: 27 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:bgu:wpaper:1314
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Find related papers by JEL classification:
  • C9 - Mathematical and Quantitative Methods - - Design of Experiments
  • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification

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  1. Kaplan, Todd & Ruffle, Bradley, 2007. "Which way to cooperate," MPRA Paper 3381, University Library of Munich, Germany.
  2. Potters, J.J.M. & Sefton, M. & Vesterlund, L., 2003. "After You - Endogenous Sequencing in Voluntary Contribution Games," Discussion Paper 2003-98, Tilburg University, Center for Economic Research.
  3. Huck, Steffen & Müller, Wieland & Normann, Hans-Theo, 1999. "Stackelberg beats Cournot: On collusion and efficiency in experimental markets," SFB 373 Discussion Papers 1999,32, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
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  6. MiguelA. Fonseca & Hans-Theo Normann, 2008. "Mergers, Asymmetries and Collusion: Experimental Evidence," Economic Journal, Royal Economic Society, vol. 118(527), pages 387-400, 03.
  7. Hamilton, Jonathan H. & Slutsky, Steven M., 1990. "Endogenous timing in duopoly games: Stackelberg or cournot equilibria," Games and Economic Behavior, Elsevier, vol. 2(1), pages 29-46, March.
  8. Chamley, Christophe & Gale, Douglas, 1994. "Information Revelation and Strategic Delay in a Model of Investment," Econometrica, Econometric Society, vol. 62(5), pages 1065-85, September.
  9. Engelmann, Dirk & Grimm, Veronika, 2008. "Mechanisms for efficient voting with private information about preferences," FAU Discussion Papers in Economics 03/2008, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
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