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The approval mechanism solves the prisoner's dilemma theoretically and experimentally

Author

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  • Tatsuyoshi Saijo

    (School of Economics and Management, Kochi University of Technology)

  • Yoshitaka Okano

    (School of Economics and Management, Kochi University of Technology)

  • Takafumi Yamakawa

    (Osaka University)

Abstract

Consider a situation where players in a prisoner's dilemma game can approve or reject the other's choice such as cooperation or defection. If both players approve the other's choice, the outcome is the one they chose, whereas if either one rejects the other's choice, the outcome is the one when both defect, which we name the approval mechanism herein (this is inspired by the Cold War doctrine of mutually assured destruction). Experimentally, we find that the cooperation rate with the approval mechanism is 90% in round one and averages 93.2% across the 19 rounds. The questionnaire analysis also allows us to find that subjects' behavior is consistent with subgame perfect elimination of weakly dominated strategies (SPEWDS) rather than Nash equilibrium (NE) or subgame perfect Nash equilibrium (SPNE) behavior. Theoretically, this mechanism implements cooperation in SPEWDS, but not in NE or SPNE.

Suggested Citation

  • Tatsuyoshi Saijo & Yoshitaka Okano & Takafumi Yamakawa, 2015. "The approval mechanism solves the prisoner's dilemma theoretically and experimentally," Working Papers SDES-2015-12, Kochi University of Technology, School of Economics and Management, revised Feb 2015.
    • Handle: RePEc:kch:wpaper:sdes-2015-12
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    File URL: http://www.souken.kochi-tech.ac.jp/seido/wp/SDES-2015-12.pdf
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    References listed on IDEAS

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    Cited by:

    1. Koffi Serge William Yao & Emmanuelle Lavaine & Marc Willinger, 2021. "Effectiveness of the approval mechanism for CPR dilemmas: unanimity versus majority rule," Working Papers hal-03234786, HAL.
    2. Koffi Serge William Yao & Emmanuelle Lavaine & Marc Willinger, 2022. "Does the approval mechanism induce the efficient extraction in common pool resource games?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(1), pages 111-139, January.
    3. Yao, Koffi Serge William & Lavaine, Emmanuelle & Willinger, Marc, 2024. "Effectiveness of the approval mechanism in a three-player common pool resource dilemma," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 109(C).

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    More about this item

    Keywords

    prisoner’s dilemma; approval mechanism; mutually assured destruction; cooperation; subgame perfect elimination of weakly dominated strategies; experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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