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Beliefs, Learning, and Personality in the Indefinitely Repeated Prisoner's Dilemma

Author

Listed:
  • Gill, David

    (Purdue University)

  • Rosokha, Yaroslav

    (Purdue University)

Abstract

We aim to understand the role and evolution of beliefs in the indefinitely repeated prisoner's dilemma (IRPD). To do so, we elicit beliefs about the supergame strategies chosen by others. We find that heterogeneity in beliefs and changes in beliefs with experience are central to understanding behavior and learning in the IRPD. Beliefs strongly predict cooperation, initial beliefs match behavior quite well, most subjects choose strategies that perform well given their beliefs, and beliefs respond to experience while becoming more accurate over time. Finally, we uncover a novel mechanism whereby trusting subjects learn to cooperate through their interaction with experience.

Suggested Citation

  • Gill, David & Rosokha, Yaroslav, 2022. "Beliefs, Learning, and Personality in the Indefinitely Repeated Prisoner's Dilemma," IZA Discussion Papers 15492, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15492
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    Cited by:

    1. Maximilian Andres, 2023. "Communication in the Infinitely Repeated Prisoner's Dilemma: Theory and Experiments," Papers 2304.12297, arXiv.org.

    More about this item

    Keywords

    infinitely repeated prisoner’s dilemma; cooperation; optimism; belief elicitation; supergame strategies; experimentation; trust; experiment;
    All these keywords.

    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
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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