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Voluntary Cooperation Based on Equilibrium Retribution - An Experiment Testing Finite-Horizon Folk Theorems

Author

Listed:
  • Lisa V. Bruttel

    () (University of Konstanz, Department of Economics)

  • Werner Güth

    () (Max Planck Institute of Economics, Strategic Interaction Group)

  • Ulrich Kamecke

    () (Humboldt-University Berlin, Department of Business and Economics)

  • Vera Popova

    () (Max Planck Institute of Economics, Strategic Interaction Group)

Abstract

Unlike previous attempts to implement cooperation in a prisoners' dilemma game with an infinite horizon in the laboratory, we focus on extended prisoners' dilemma games in which a second (pure strategy) equilibrium allows for voluntary cooperation in all but the last round. Our four main experimental treatments distinguish long versus short horizon and strict versus non-strict additional equilibrium compared to the control treatment, a standard prisoners' dilemma. Quite surprisingly, according to our results, only a strict additional equilibrium increases cooperation rate for a given time horizon. As expected a longer time horizon promotes cooperation.

Suggested Citation

  • Lisa V. Bruttel & Werner Güth & Ulrich Kamecke & Vera Popova, 2009. "Voluntary Cooperation Based on Equilibrium Retribution - An Experiment Testing Finite-Horizon Folk Theorems," Jena Economic Research Papers 2009-030, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2009-030
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    File URL: http://zs.thulb.uni-jena.de/receive/jportal_jparticle_00148230
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    Cited by:

    1. Lisa Bruttel & Werner Güth & Ulrich Kamecke, 2012. "Finitely repeated prisoners’ dilemma experiments without a commonly known end," International Journal of Game Theory, Springer;Game Theory Society, vol. 41(1), pages 23-47, February.
    2. Fabian Winter, 2013. "Fairness norms can explain the emergence of specific cooperation norms in the Battle of the Prisoners Dilemma," Jena Economic Research Papers 2013-016, Friedrich-Schiller-University Jena.

    More about this item

    Keywords

    Folk theorem; Finite horizon; Prisoners' dilemma; Experiment;

    JEL classification:

    • 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

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