On the Determinants of Cooperation in Infinitely Repeated Games: A Survey

Pedro Dal Bó and Guillaume R. Fréchette

A growing experimental literature studies the determinants of cooperation in infinitely repeated games, tests different predictions of the theory, and suggests an empirical solution to the problem of multiple equilibria. To provide a robust description of the literature’s findings, we gather and analyze a metadata set of experiments on infinitely repeated prisoner’s dilemma games. The experimental data show that cooperation is affected by infinite repetition and is more likely to arise when it can be supported in equilibrium. However, the fact that cooperation can be supported in equilibrium does not imply that most subjects will cooperate. High cooperation rates will emerge only when the parameters of the repeated game are such that cooperation is very robust to strategic uncertainty. We also review the results regarding the effect of imperfect monitoring, changing partners, and personal characteristics on cooperation and the strategies used to support it.
Full-Text Access | Supplementary Materials

廣告

舊書新入

剛得獎的作者,熱騰騰

(書中提到,他的第一篇在 JF 刊出的大作,竟然是「破例」開門錄取的論文…因為大大不同於「效率市場假說」的傳統觀點)

eBay.BIN2-每輪15回合.有時間(2009-碩專班)

M TimeSpan =15
V Next Timespan = if(OR(mod(simstep,15)=14, mod(simstep,15)=0), 15,5)
M StartTime = 0
M EndTime = 90
M InitialSteps=0
M TimeFormat = "回合#0"
M NumberFormat = "#,##0.##"
V myStep=SimStep
V NOTR=15
V NR=15
V TimeLeft=NOTR-mod(SimStep,NOTR)
V base = 0.5
V UpperInc = 1
V minCr0 = if(base+0.5*base*round(randbetween(0,UpperInc))1 & v0>=previous(price3)+minCR0 & previous(winner0)=0, previous(price3)+minCR0,NA)
V bid1=if(mod(simStep,15)>1 & v1>=previous(price3)+minCR1 & previous(winner1)=0, previous(price3)+minCR1,NA)
V bid2=if(mod(simStep,15)>1 & v2>=previous(price3)+minCR2 & previous(winner2)=0, previous(price3)+minCR2,NA)
V f_bid0=if(OR(bid0=na,bid0=none),-999,bid0)
V f_bid1=if(OR(bid1=na,bid1=none),-999,bid1)
V f_bid2=if(OR(bid2=na,bid2=none),-999,bid2)
V bidHistory=if(mod(SIMSTEP,15)=0,0,if(f_bid0=-999 & f_bid1=-999,previous(bidHistory),previous(bidHistory)+1))
p bidHistory.Label="出價次數"
V price1 = if(price3>=BIN_selected, if(previous(End1)=0 & End1=1, BIN_selected,NA), 0)
V price2 = if(OR(previous(Bestoffer)>=BIN_selected,price3>=BIN_selected), if(previous(End2)=0,BIN_selected,NA), previous(Bestoffer)*BestOfferAccept)
V BestOffer=if(formatSelected=2 & mod(simStep,15)>1, if(End2=1,NA,max(bid0,bid1,bid2)),NA)
V price3 =if(mod(SimStep,15)=0 & simStep=0,0,max(if(mod(SimStep,15)=1,minP,previous(price3)),bid0,bid1,bid2))
V price4 =if(mod(SimStep,15)>1,if(max(previous(price3),bid0,bid1,bid2)>=BIN_selected,BIN_selected,max(previous(price3),bid0,bid1,bid2)),minP)
V Price =if(formatSelected=1,Price1,if(formatSelected=2,price2,if(formatSelected=3,price3,price4)))
V SoldPrice=if(mod(simStep,15)=0,0,if(price>0,price,previous(soldPrice,0)))
P SoldPrice.label="成交價"
P BIN_selected.label="你設定的直接購買 BIN"
P BestOffer.label="此次賣方出價"
P myReward.label="當期獲利"
P acc_Reward.label="累計獲利"
V secondP=if(formatSelected>2,if(mod(SIMSTEP,15)previous(price),previous(price),previous(secondP))),price)
V winner0=if(mod(SIMSTEP,15)=0,0,if(max(f_bid1,f_bid2)1 & formatSelected=1,if(price3>=BIN_Selected,1,0),0)
V End2=if(mod(simStep,15)>2 & formatSelected=2,if(OR(price3>=BIN_selected,BestOfferAccept=1),1,previous(End2,0)),if(mod(simStep,15)=0 & formatSelected=2, BestofferAccept,0))
V End3=0
V End4 = if(mod(simStep,15)>1 & formatSelected=4 & price>=BIN_selected,1,0)
V Listfee = 0
V Comissionfee=0
V myCost=0
V myReward =if(OR(formatSelected=3,formatselected = 4 & price2,mod(simStep,15)=0),previous(BIN_selected,0),NA))
D BestOfferAccept=if(mod(simStep,15)>1 & formatSelected=2 & End2=0,{0,1},NA)
P BestOfferAccept.desc = {"拒絕","接受"}
P BestOfferAccept.label="接受此出價嗎?"
T Table 1 =if(formatSelected =1, {"soldPrice","BIN_selected","BestOffer","myReward","acc_Reward"},{"soldPrice","Price","BIN_selected","BestOffer","BestOfferAccept","bidHistory","myReward","acc_Reward"})
T Table 1.color = {"#CCCCCC", "#FFFFFF"}
T Table 1.Label = "Table 1. 拍賣紀錄"
M TextInformation =if(OR(End1=1,End2=1),"eBay.End.htm",if(formatselected=1, "eBay.format1.htm",if(formatselected=2,"eBay.format2.htm",if(formatselected=3,"eBay.format3.htm","eBay.format4.htm"))))
M TextInformation.Label = "拍賣主頁"

Moral Impossibility in the Petersburg Paradox : A Literature Survey and Experimental Evidence

Date: 2010
By: Tibor Neugebauer (Luxembourg School of Finance, University of Luxembourg)
URL: http://d.repec.org/n?u=RePEc:crf:wpaper:10-14&r=net
The Petersburg paradox has led to much thought for three centuries. This paper describes the paradox, discusses its resolutions advanced in the literature while alluding to the historical context, and presents experimental data. In particular, Bernoulli’s search for the level of moral impossibility in the Petersburg problem is stressed; beyond this level small probabilities are considered too unlikely to be relevant for judgment and decision making. In the experiment, the level of moral impossibility is elicited through variations of the gamble-length in the Petersburg gamble. Bernoulli’s conjecture that people neglect small probability events is supported by a statistical power analysis.
Keywords: Petersburg paradox; economic history; bounded rationality; significance level; experimental economics
JEL: B3

Equity and Efficiency in Multi-Worker Firms: Insights from Experimental Economics

Date: 2011-05
By: Abeler, Johannes (University of Nottingham)
Altmann, Steffen (IZA)
Goerg, Sebastian (Max Planck Institute for Research on Collective Goods)
Kube, Sebastian (University of Bonn)
Wibral, Matthias (University of Bonn)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5727&r=net
In this paper, we discuss recent evidence from economic experiments that study the impact of social preferences on workplace behavior. We focus on situations in which a single employer interacts with multiple employees. Traditionally, equity and efficiency have been seen as opposing aims in such work environments: individual pay-for-performance schemes maximize efficiency but might lead to inequitable outcomes. We present findings from laboratory experiments that show under which circumstances partially incomplete contracts can create equitable work environments while at the same time reaching surprisingly efficient outcomes.
Keywords: incentives, wage setting, equity, gift exchange, reciprocity, incomplete contracts, organizational economics, laboratory experiments
JEL: J33

Size Matters – When it Comes to Lies

Date: 2011-05-17
By: Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany)
Ruslan Gurtoviy (Department of Business Administration, University of Trier, Germany)
Verena Utikal (Department of Economics, University of Erlangen-Nürnberg, Germany)
URL: http://d.repec.org/n?u=RePEc:knz:dpteco:1114&r=net
A small lie appears trivial but it obviously violates moral commandments. We analyze whether the preference for others’ truth telling is absolute or depends on the size of a lie. In a laboratory experiment we compare punishment for different sizes of lies controlling for the resulting economic harm. We find that people are sensitive to the size of a lie and that this behavioural pattern is driven by honest people. People who lie themselves punish softly in any context.
Keywords: Lying, norm violation, punishment, experiment
JEL: C91

Asymmetric obligations

 

Date: 2011
By: Riedel, Nadine
Schildberg-Hörisch, Hannah
URL: http://d.repec.org/n?u=RePEc:zbw:fziddp:282011&r=net
We use a laboratory experiment to investigate the behavioral effects of obligations that are not backed by binding deterrent incentives. To implement such expressive law’ we introduce different levels of very weakly incentivized, symmetric and asymmetric minimum contribution levels (obligations) in a repeated public goods experiment. The results provide evidence for a weak expressive function of law: while the initial impact of high obligations on behavior is strong, it decreases over time. Asymmetric obligations are as effective as symmetric ones. Our results are compatible with the argument that expressive law affects behavior by attaching an emotional cost of disobeying the own obligation. —
Keywords: Non-binding Obligations,Expressive law,Public goods,Experiment
JEL: C92

The impact of the termination rule on cooperation in a prisoner’s dilemma experiment

Date: 2011
By: Normann, Hans-Theo
Wallace, Brian
URL: http://d.repec.org/n?u=RePEc:zbw:dicedp:19&r=net
Cooperation in prisoner’s dilemma games can usually be sustained only if the game has an infinite horizon. We analyze to what extent the theoretically crucial distinction of finite vs. infinite-horizon games is reflected in the outcomes of a prisoner’s dilemma experiment. We compare three different experimental termination rules in four treatments: a known finite end, an unknown end, and two variants with a random termination rule (with a high and with a low continuation probability, where cooperation can occur in a subgame-perfect equilibrium only with the high probability). We find that the termination rules do not significantly affect average cooperation rates. Specifically, employing a random termination rule does not cause significantly more cooperation compared to a known finite horizon, and the continuation probability does not significantly affect average cooperation rates either. However, the termination rules may influence cooperation over time and end-game behavior. Further, the (expected) length of the game significantly increases cooperation rates. The results suggest that subjects may need at least some learning opportunities (like repetitions of the supergame) before significant backward induction arguments in finitely repeated game have force. —
Keywords: Prisoner’s dilemma,Repeated games,Infinite-horizon games,Experimental economics
JEL: C72

Higher Order Risk Attitudes, Demographics, and Financial Decisions

Date: 2011
By: Noussair, C.N.
Trautmann, S.T.
Kuilen, G. van de (Tilburg University, Center for Economic Research)
URL: http://d.repec.org/n?u=RePEc:dgr:kubcen:2011055&r=net
We conduct an experiment to study the prevalence of the higher order risk attitudes of prudence and temperance, in a large demographically representative sample, as well as in a sample of undergraduate students. Participants make pairwise choices between lotteries of the form proposed by Eeckhoudt and Schlesinger (2006). The choices in these lotteries isolate prudent from imprudent, and temperate from intemperate, behavior. We relate individuals’ risk aversion, prudence, and temperance levels to demographics and financial decisions. We observe that the majority of individuals’ decisions are consistent with risk aversion, prudence, and temperance, in both the student and the demographically representative sample. An individual’s level of prudence is predictive of his wealth, saving, and borrowing behavior outside of the experiment, while temperance predicts the riskiness of portfolio choices. Our findings suggest that the coefficient of relative prudence for a representative individual is approximately equal to two.
Keywords: prudence;temperance;saving;portfolio choice;experiment
JEL: C91