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Talkin' Bout Cooperation

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  • Özkes, Ali
  • Hanaki, Nobuyuki

Abstract

We experimentally study the interaction of the effects of the strategic environment and com- munication on the observed levels of cooperation in two-person finitely repeated games with a Pareto-inefficient Nash equilibrium. We replicate previous findings that point to higher levels of tacit cooperation under strategic complementarity compared to strategic substitution. In our data, however, this is not due to differences in levels of reciprocity as suggested previously. Instead, we find that slow learning and noisy choices might drive this effect. When subjects are allowed to communicate in free-form online chat before making choices, cooperation levels increase significantly to the extent that the difference in the two strategic environments dis- appears. A machine-assisted natural language processing approach shows how the content of communication differs in the two strategic environments.

Suggested Citation

  • Özkes, Ali & Hanaki, Nobuyuki, 2020. "Talkin' Bout Cooperation," Department for Strategy and Innovation Working Paper Series 08/2020, WU Vienna University of Economics and Business.
    • Handle: RePEc:wiw:wus055:7505
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    Cited by:

    1. Maximilian Andres & Lisa Bruttel & Jana Friedrichsen, 2020. "Choosing between explicit cartel formation and tacit collusion – An experiment," CEPA Discussion Papers 19, Center for Economic Policy Analysis.
    2. Andres, Maximilian & Bruttel, Lisa & Friedrichsen, Jana, 2023. "How communication makes the difference between a cartel and tacit collusion: A machine learning approach," European Economic Review, Elsevier, vol. 152(C).
    3. Andres, Maximilian & Bruttel, Lisa & Friedrichsen, Jana, 2021. "How do sanctions work? The choice between cartel formation and tacit collusion," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242372, Verein für Socialpolitik / German Economic Association.
    4. Tebbe, Eva & Wegener, Benjamin, 2022. "Is natural language processing the cheap charlie of analyzing cheap talk? A horse race between classifiers on experimental communication data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).

    More about this item

    Keywords

    Communication; Cooperation; Reinforcement learning; Strategic environment; Structural topic modeling;
    All these keywords.

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