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Cooperation in stochastic games: a prisoner’s dilemma experiment

Author

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  • Andrew Kloosterman

    (University of Virginia)

Abstract

This experiment investigates a stochastic version of the infinitely repeated prisoner’s dilemma. The stochastic element introduces the importance of beliefs about the future for supporting cooperation as well as cooperation and defection on the equilibrium path. There is more cooperation in treatments where beliefs predict cooperation after subjects gain sufficient experience. There is some evidence for cooperation and defection as predicted by equilibrium, but there is stronger evidence for behavior conditioning on past actions that is not consistent with equilibrium play. In particular, subjects continue cooperating even when it is no longer possible in equilibrium for the realized game.

Suggested Citation

  • Andrew Kloosterman, 2020. "Cooperation in stochastic games: a prisoner’s dilemma experiment," Experimental Economics, Springer;Economic Science Association, vol. 23(2), pages 447-467, June.
    • Handle: RePEc:kap:expeco:v:23:y:2020:i:2:d:10.1007_s10683-019-09619-w
    DOI: 10.1007/s10683-019-09619-w
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    References listed on IDEAS

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    More about this item

    Keywords

    Stochastic games; Experimental economics; Prisoner’s dilemma; Cooperation;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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