Cooperation, but No Reciprocity: Individual Strategies in the Repeated Prisoner's Dilemma
American Economic Review
vol. 105,
no. 9, September 2015
(pp. 2882-2910)
Abstract
In the repeated prisoner's dilemma, predictions are notoriously difficult. Recently, however, Blonski, Ockenfels, and Spagnolo (2011)—henceforth, BOS‐showed that experimental subjects predictably cooperate when the discount factor exceeds a particular threshold. I analyze individual strategies in four recent experiments to examine whether strategies are predictable, too. Behavior is well summarized by "Semi-Grim" strategies: cooperate after mutual cooperation, defect after mutual defection, randomize otherwise. This holds both in aggregate and individually, and it explains the BOS-threshold: Semi-Grim equilibria appear as the discount factor crosses this threshold, and then, subjects start cooperating in round 1 and switch to Semi-Grim in continuation play. (JEL C72, C73, C92, D12)Citation
Breitmoser, Yves. 2015. "Cooperation, but No Reciprocity: Individual Strategies in the Repeated Prisoner's Dilemma." American Economic Review, 105 (9): 2882-2910. DOI: 10.1257/aer.20130675Additional Materials
JEL Classification
- C72 Noncooperative Games
- C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
- C92 Design of Experiments: Laboratory, Group Behavior
- D12 Consumer Economics: Empirical Analysis