American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Equilibrium Selection in the Repeated Prisoner's Dilemma: Axiomatic Approach and Experimental Evidence
American Economic Journal: Microeconomics
vol. 3,
no. 3, August 2011
(pp. 164–92)
Abstract
We propose an axiomatic approach for equilibrium selection in the discounted, infinitely repeated symmetric Prisoner's Dilemma. Our axioms characterize a unique selection criterion that is also useful as a tool for applied comparative statics exercises as it results in a critical discount factor δ* strictly larger than δ, the standard criterion that has often been used in applications. In an experimental test we find a strong predictive power of our proposed criterion. For parameter changes where the standard and our criterion predict differently, changes in observed cooperation follow predictions based on δ* . (JEL C72, C73, C92, D81)Citation
Blonski, Matthias, Peter Ockenfels, and Giancarlo Spagnolo. 2011. "Equilibrium Selection in the Repeated Prisoner's Dilemma: Axiomatic Approach and Experimental Evidence." American Economic Journal: Microeconomics, 3 (3): 164–92. DOI: 10.1257/mic.3.3.164Additional Materials
JEL Classification
- C72 Noncooperative Games
- C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
- C92 Design of Experiments: Laboratory, Group Behavior
- D81 Criteria for Decision-Making under Risk and Uncertainty
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