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Long-term commitment and cooperation

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  • Frédéric Schneider
  • Roberto A. Weber

Abstract

We study how the willingness to enter long-term bilateral relationships affects cooperation even when parties have little information about each other, ex ante, and cooperation is otherwise unenforceable. We experimentally investigate a finitely-repeated Prisoner’s Dilemma, allowing players to endogenously select interaction durations. Consistent with prior research, longer interactions facilitate cooperation. However, many individuals avoid long-term commitment, with uncooperative types less likely to commit than conditional cooperators. Endogenously chosen long-term commitment yields higher cooperation rates (98% in one condition) than exogenously imposed commitment. Thus, the willingness to enter into long-term relationships provides a means for fostering - and screening for - efficient cooperation.

Suggested Citation

  • Frédéric Schneider & Roberto A. Weber, 2013. "Long-term commitment and cooperation," ECON - Working Papers 130, Department of Economics - University of Zurich.
  • Handle: RePEc:zur:econwp:130
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    File URL: http://www.econ.uzh.ch/static/wp/econwp130.pdf
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    References listed on IDEAS

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    Cited by:

    1. Matthew Embrey & Guillaume R. Frechette & Sevgi Yuksel, 2016. "Cooperation in the Finitely Repeated Prisoner's Dilemma," Working Paper Series 08616, Department of Economics, University of Sussex.
    2. Lorna Zischka, 2016. "The Interaction between Prosocial (Giving) Behaviours and Social Cohesion," Economics & Management Discussion Papers em-dp2016-07, Henley Business School, Reading University.

    More about this item

    Keywords

    Repeated games; cooperation; voluntary commitment;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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