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Interplay of Cooperation and Coordination in Indefinitely Repeated Games

Author

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  • Laferrière, Vincent
  • Montez, João
  • Roux, Catherine
  • Thoeni, Christian

Abstract

We study cooperation in the presence of coordination needs in indefinitely repeated games. In a laboratory experiment, subjects play a Prisoner's Dilemma and a Stag Hunt in each round, either with different partners (single-game contact) or with the same partner (multigame contact), creating strategic interplay across games in the latter case. In theory, multigame contact can strengthen cooperation without undermining coordination as players can link the strategy in one game to their partner’s actions in the other game. In contrast, we observe that multigame contact can reduce both cooperation and coordination rates, and it lowers payoffs. While a significant share of subjects link strategies across games, a large share instead restricts punishment to the game in which the deviation occurred. Such limited deterrence fails to prevent deviations, with occasional cross-game punishment destabilizing both cooperation and coordination and leading to more frequent low-payoff outcomes.

Suggested Citation

  • Laferrière, Vincent & Montez, João & Roux, Catherine & Thoeni, Christian, 2025. "Interplay of Cooperation and Coordination in Indefinitely Repeated Games," CEPR Discussion Papers 20509, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:20509
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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