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Cooperation among strangers: an experiment with indefinite interaction

Author

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  • Gabriele Camera
  • Marco Casari

Abstract

We study the emergence of norms of cooperation in experimental economies populated by strangers interacting indefinitely and lacking formal enforcement institutions. In all treatments the efficient outcome is sustainable as an equilibrium. We address the following questions: can these economies achieve full efficiency? Which institutions for monitoring and enforcement promote cooperation? Finally, what classes of strategies are employed to achieve high efficiency? We find that, first, cooperation can be sustained even in anonymous settings; second, some type of monitoring and punishment institutions significantly promote cooperation; and, third, subjects dislike indiscriminate strategies and prefer selective strategies.

Suggested Citation

  • Gabriele Camera & Marco Casari, 2007. "Cooperation among strangers: an experiment with indefinite interaction," Purdue University Economics Working Papers 1201, Purdue University, Department of Economics.
  • Handle: RePEc:pur:prukra:1201
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    File URL: http://www.krannert.purdue.edu/programs/phd/Working-papers-series/2007/1201.pdf
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    References listed on IDEAS

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    Cited by:

    1. Gabriele Camera & Marco Casari, 2009. "Cooperation among Strangers under the Shadow of the Future," American Economic Review, American Economic Association, vol. 99(3), pages 979-1005, June.
    2. Sergio Sousa, 2010. "Cooperation and Punishment under Uncertain Enforcement," Discussion Papers 2010-06, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    3. Sergio Sousa, 2010. "Cooperation and Punishment under Uncertain Enforcement," Discussion Papers 2010-06, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    4. Stahl, Dale O., 2013. "An experimental test of the efficacy of a simple reputation mechanism to solve social dilemmas," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 116-124.

    More about this item

    Keywords

    experiments; repeated games; cooperation; equilibrium selection; prisoners’ dilemma; random matching;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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