Tacit Cooperation, Strategic Uncertainty, and Coordination Failure: Evidence from Repeated Dominance Solvable Games

This paper reports an experiment designed to discover how the prospect of future interaction influences people's ability to tacitly cooperate in repeated dominance solvable games. The experiment varies two treatment variables: whether the constituent game is solvable by strict or iterated domin...

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Bibliographic Details
Published in:Games and economic behavior 2002-01, Vol.38 (1), p.156-175
Main Authors: Van Huyck, John B., Wildenthal, John M., Battalio, Raymond C.
Format: Article
Language:English
Subjects:
Cooperation
coordination
dominance
duopoly
Economics
experiment
Experiments
Game theory
Microeconomics
Prisoner's dilemma
prisoners' dilemma
Public goods
repeated games
Uncertainty
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Summary:This paper reports an experiment designed to discover how the prospect of future interaction influences people's ability to tacitly cooperate in repeated dominance solvable games. The experiment varies two treatment variables: whether the constituent game is solvable by strict or iterated dominance and whether prospective interaction is finitely or randomly terminated. Specifically, we introduce a special repeated matching protocol consisting of an initial phase terminated randomly and a terminal phase of T periods. We call this protocol T-death. The T-death protocol allows us to observe a pair's behavior in both a sequence of infinite continuation games and a sequence of finite continuation games. Journal of Economic Literature Classification Numbers: C720, C920, 1120, 1400.
ISSN:0899-8256
1090-2473
DOI:10.1006/game.2001.0860