Cooperation, but No Reciprocity: Individual Strategies in the Repeated Prisoner's Dilemma

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...

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Bibliographic Details
Published inThe American economic review Vol. 105; no. 9; pp. 2882 - 2910
Main Author Breitmoser, Yves
Format Journal Article
LanguageEnglish
Published Nashville American Economic Association 01.09.2015
American Economic Assoc
Subjects
Cooperation
Datasets
Discounts
Economic theory
Equilibrium
Experiments
Game theory
Games
Laboratories
Population estimates
Predictions
Prisoners dilemma
Probabilities
Probability
Repeated games
Repeated prisoners dilemma
Standard error
Tit for tat
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Summary: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.
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ISSN:0002-8282
1944-7981
DOI:10.1257/aer.20130675