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Alternating or compensating? An experimentrepeated sequential best shot game

Author

Listed:
  • Lisa Bruttel

    (University of Konstanz, Department of Economics)

  • Werner Güth

    (Max Planck Institute of Economics, Strategic Interaction Group)

Abstract

In the two-person sequential best shot game, first player 1 contributes to a public good and then player 2 is informed about this choice before contributing. The payoff from the public good is the same for both players and depends only on the maximal contribution. Efficient voluntary cooperation in the repeated best shot game therefore requires that only one player should contribute in a given round. To provide better chances for such cooperation, we enrich the sequential best shot base game by a third stage allowing the party with the lower contribution to transfer some of its periodic gain to the other party. Participants easily establish cooperation in the finitely repeated game. When cooperation evolves, it mostly takes the form of "labor division," with one participant constantly contributing and the other constantly compensating. However, in a treatment in which compensation is not possible, (more or less symmetric) alternating occurs frequently and turns out to be almost as efficient as labor division.

Suggested Citation

  • Lisa Bruttel & Werner Güth, 2013. "Alternating or compensating? An experimentrepeated sequential best shot game," Jena Economics Research Papers 2013-045, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2013-045
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    References listed on IDEAS

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    1. Tjaša Bjedov & Thierry Madiès & Marie Claire Villeval, 2016. "Communication And Coordination In A Two-Stage Game," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1519-1540, July.

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    More about this item

    Keywords

    best shot game; coordination; transfer; experiment;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative 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

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