Individual Characteristics and Behavior in Repeated Games: An Experimental Study

Date: 2014-10
By: Douglas Davis (Virginia Commonwealth University)
Asen Ivanov (Queen Mary University of London)
Oleg Korenok (Virginia Commonwealth University)
Using a laboratory experiment, we investigate whether a variety of behaviors in repeated games are related to an array of individual characteristics that are popular in economics: risk attitude, time preference, trust, trustworthiness, altruism, strategic skills in one-shot matrix games, compliance with first-order stochastic dominance, ability to plan ahead, and gender. We do find some systematic relationships. A subject’s patience, gender, altruism, and compliance with first-order stochastic dominance have some limited systematic effects on her behavior in repeated games. At the level of a pair of subjects who are playing a repeated game, each subject’s patience, gender, and ability to choose an available dominant strategy in a one-shot matrix game systematically affect the frequency of the cooperate-cooperate outcome. However, overall, the number of systematic relationships is surprisingly small.
Keywords: Experiment, Repeated game, Individual characteristics
JEL: C91 C92 D03 D70

Individual Learning and Cooperation in Noisy Repeated Games

Date: 2013-07-06
By: Yuichi Yamamoto (Department of Economics, University of Pennsylvania)
We investigate whether two players in a long-run relationship can maintain cooperation when the details of the underlying game are unknown. Specifically, we consider a new class of repeated games with private monitoring, where an unobservable state of the world influences the payoff functions and/or the monitoring structure. Each player privately learns the state over time but cannot observe what the opponent learned. We show that there are robust equilibria in which players eventually obtain payoffs as if the true state were common knowledge and players played a “belief-free” equilibrium. We also provide explicit equilibrium constructions in various economic examples
Keywords: repeated game, private monitoring, incomplete information, belief-free equilibrium, ex-post equilibrium, individual learning
JEL: C72