TY - JOUR
T1 - Cooperation in the finitely repeated prisoner's dilemma
AU - Embrey, Matthew
AU - Fréchette, Guillaume R.
AU - Yuksel, Sevgi
N1 - Funding Information:
∗We thank the editor, anonymous referees, James Andreoni, Yoella Bereby-Meyer, Russell Cooper, Pedro Dal Bó, Douglas DeJong, Robert Forsythe, Drew Fudenberg, Daniel Friedman, P.J. Healy, Steven Lehrer, Friederike Mengel, John Miller, Muriel Niederle, Ryan Oprea, Louis Putterman, Thomas Ross, Alvin Roth, Andy Schotter, Andrzej Skrzypacz, Charlie Sprenger, Lise Vesterlund, James Walker and Matthew Webb for helpful comments, suggestions, or for making their data sets available; as well as conference and seminar participants at Purdue U., Bonn U., Goethe U., U. of Cologne, LSE, Durham U., the GAMES 2016 conference, MBEES, U. of Michigan, OSU, the Social Dilemmas Conference at Brown U., the Mont Tremblant conference in Political Economy, the Miniconference on Experimental Political Economy at CalTech, the ESA meetings in Fort Lauderdale, the SITE conference and the Behavioral and Experimental Economics class at Stanford, the Workshop on Norms and Cooperation at the U. of Zurich, UC Santa Cruz, and NYU Abu Dhabi. We would further like to thank the National Science Foundation (grant SES-1225779), and the Center for Experimental Social Science for research support. We are responsible for all errors.
Publisher Copyright:
© The Author(s) 2017.
PY - 2018/2/1
Y1 - 2018/2/1
N2 - More than half a century after the first experiment on the finitely repeated prisoner's dilemma, evidence on whether cooperation decreases with experience- as suggested by backward induction-remains inconclusive. This article provides ameta-analysis of prior experimental research and reports the results of a new experiment to elucidate how cooperation varies with the environment in this canonical game.We describe forces that affect initial play (formation of cooperation) and unraveling (breakdown of cooperation). First, contrary to the backward induction prediction, the parameters of the repeated game have a significant effect on initial cooperation. We identify how these parameters impact the value of cooperation- as captured by the size of the basin of attraction of always defect-to account for an important part of this effect. Second, despite these initial differences, the evolution of behavior is consistent with the unraveling logic of backward induction for all parameter combinations. Importantly, despite the seemingly contradictory results across studies, this article establishes a systematic pattern of behavior: subjects converge to use threshold strategies that conditionally cooperate until a threshold round; conditional on establishing cooperation, the first defection round moves earlier with experience. Simulation results generated from a learning model estimated at the subject level provide insights into the long-term dynamics and the forces that slow down the unraveling of cooperation.
AB - More than half a century after the first experiment on the finitely repeated prisoner's dilemma, evidence on whether cooperation decreases with experience- as suggested by backward induction-remains inconclusive. This article provides ameta-analysis of prior experimental research and reports the results of a new experiment to elucidate how cooperation varies with the environment in this canonical game.We describe forces that affect initial play (formation of cooperation) and unraveling (breakdown of cooperation). First, contrary to the backward induction prediction, the parameters of the repeated game have a significant effect on initial cooperation. We identify how these parameters impact the value of cooperation- as captured by the size of the basin of attraction of always defect-to account for an important part of this effect. Second, despite these initial differences, the evolution of behavior is consistent with the unraveling logic of backward induction for all parameter combinations. Importantly, despite the seemingly contradictory results across studies, this article establishes a systematic pattern of behavior: subjects converge to use threshold strategies that conditionally cooperate until a threshold round; conditional on establishing cooperation, the first defection round moves earlier with experience. Simulation results generated from a learning model estimated at the subject level provide insights into the long-term dynamics and the forces that slow down the unraveling of cooperation.
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U2 - 10.1093/qje/qjx033
DO - 10.1093/qje/qjx033
M3 - Article
AN - SCOPUS:85044586090
VL - 133
SP - 509
EP - 551
JO - Quarterly Journal of Economics
JF - Quarterly Journal of Economics
SN - 0033-5533
IS - 1
ER -