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A Simple Approach for Organizing Behavior and Explaining Cooperation in Repeated Games

Author

Listed:
  • Asen Ivanov

    () (Department of Economics, VCU School of Business)

  • Douglas D. Davis

    () (Department of Economics, VCU School of Business)

  • Korenok Oleg

    () (Department of Economics, VCU School of Business)

Abstract

We introduce a novel approach for organizing behavior and explaining cooperation in repeated games. Our approach is based on the idea that players differ according to an inherent propensity to cooperate that systematically affects behavior and cooperation levels. We formulate the empirical implications of this idea and test them in the lab. Our data support our approach. Our main conclusions are: (i) players' strategies in a repeated game can be ranked along a single dimension, (ii) this ranking remains stable across repeated games, and (iii) the composition of a group, in terms of its players' propensities, strongly affects cooperation levels.

Suggested Citation

  • Asen Ivanov & Douglas D. Davis & Korenok Oleg, 2011. "A Simple Approach for Organizing Behavior and Explaining Cooperation in Repeated Games," Working Papers 1101, VCU School of Business, Department of Economics.
  • Handle: RePEc:vcu:wpaper:1101
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    References listed on IDEAS

    as
    1. Aoyagi, Masaki & Fr├ęchette, Guillaume, 2009. "Collusion as public monitoring becomes noisy: Experimental evidence," Journal of Economic Theory, Elsevier, vol. 144(3), pages 1135-1165, May.
    2. ENGLE-WARNICK, Jim & McCAUSLAND, William J. & MILLER, John H., 2004. "The Ghost in the Machine: Inferring Machine-Based Strategies from Observed Behavior," Cahiers de recherche 15-2004, Centre interuniversitaire de recherche en ├ęconomie quantitative, CIREQ.
    3. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    4. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, January.
    5. Feinberg, Robert M & Husted, Thomas A, 1993. "An Experimental Test of Discount-Rate Effects on Collusive Behaviour in Duopoly Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 153-160, June.
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    Cited by:

    1. Bigoni, Maria & Camera, Gabriele & Casari, Marco, 2013. "Strategies of cooperation and punishment among students and clerical workers," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 172-182.

    More about this item

    Keywords

    repeated games; cooperation; experiment;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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