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In Support of Trigger Strategies: Experimental Evidence from Two‐Person Noncooperative Games

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  • Charles F. Mason
  • Owen R. Phillips

Abstract

Cooperative equilibria can be supported in a repeated game when players use trigger strategies. This paper tests how well trigger strategies explain behavior in two‐person experimental games. Reducing payoffs for choices larger than the Cournot level induces smaller average outputs, behavior generally consistent with trigger strategy models. Reducing payoffs for choices well above the Cournot level will not affect behavior if actions are consistent with a trigger strategy involving longer‐lived, less intense punishment phases (the grim‐reaper strategy), but would matter for trigger strategies with short‐lived but intense punishment phases. Results show that behavior is most consistent with the former.

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  • Charles F. Mason & Owen R. Phillips, 2002. "In Support of Trigger Strategies: Experimental Evidence from Two‐Person Noncooperative Games," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(4), pages 685-716, December.
    • Handle: RePEc:bla:jemstr:v:11:y:2002:i:4:p:685-716
    DOI: 10.1111/j.1430-9134.2002.00685.x
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    Cited by:

    1. António Brandão & Joana Pinho & Hélder Vasconcelos, 2014. "Asymmetric Collusion with Growing Demand," Journal of Industry, Competition and Trade, Springer, vol. 14(4), pages 429-472, December.
    2. Wright, Julian, 2013. "Punishment strategies in repeated games: Evidence from experimental markets," Games and Economic Behavior, Elsevier, vol. 82(C), pages 91-102.
    3. Jeroen Hinloopen & Adriaan R. Soetevent, 2008. "Laboratory evidence on the effectiveness of corporate leniency programs," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 607-616, June.
    4. J. Hinloopen, 2003. "Cartel Stability with Time-dependent Detection Probabilities," Tinbergen Institute Discussion Papers 03-104/1, Tinbergen Institute.
    5. Hitoshi Matsushima & Tomomi Tanaka & Tomohisa Toyama, 2013. "Behavioral Approach to Repeated Games with Private Monitoring," CARF F-Series CARF-F-309, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    6. repec:ebl:ecbull:v:3:y:2002:i:6:p:1-11 is not listed on IDEAS
    7. Jeroen Hinloopen & Adriaan Soetevent, 2006. "Trust and Recidivism; the Partial Success of Corporate Leniency Program in the Laboratory," Tinbergen Institute Discussion Papers 06-067/1, Tinbergen Institute.
    8. Aoyagi, Masaki & Fréchette, Guillaume, 2009. "Collusion as public monitoring becomes noisy: Experimental evidence," Journal of Economic Theory, Elsevier, vol. 144(3), pages 1135-1165, May.
    9. Hitoshi Matsushima & Tomohisa Toyama, 2011. "Monitoring Accuracy and Retaliation in Infinitely Repeated Games with Imperfect Private Monitoring: Theory and Experiments," CIRJE F-Series CIRJE-F-795, CIRJE, Faculty of Economics, University of Tokyo.

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