On the Determinants of Cooperation in Infinitely Repeated Games A Survey

A growing experimental literature studies the determinants of cooperation in infinitely repeated games, tests different predictions of the theory, and suggests an empirical solution to the problem of multiple equilibria. To provide a robust description of the literature’s findings, we gather and ana...

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Bibliographic Details
Published inJournal of economic literature Vol. 56; no. 1; pp. 60 - 114
Main Authors Bó, Pedro Dal, Fréchette, Guillaume R.
Format Journal Article
LanguageEnglish
Published Nashville American Economic Association 01.03.2018
Subjects
Cooperation
Economic models
Equilibrium
Game theory
Games
Personal characteristics
Repetition
Uncertainty
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Summary:A growing experimental literature studies the determinants of cooperation in infinitely repeated games, tests different predictions of the theory, and suggests an empirical solution to the problem of multiple equilibria. To provide a robust description of the literature’s findings, we gather and analyze a metadata set of experiments on infinitely repeated prisoner’s dilemma games. The experimental data show that cooperation is affected by infinite repetition and is more likely to arise when it can be supported in equilibrium. However, the fact that cooperation can be supported in equilibrium does not imply that most subjects will cooperate. High cooperation rates will emerge only when the parameters of the repeated game are such that cooperation is very robust to strategic uncertainty. We also review the results regarding the effect of imperfect monitoring, changing partners, and personal characteristics on cooperation and the strategies used to support it.
ISSN:0022-0515
2328-8175
DOI:10.1257/jel.20160980