Cooperation Among Strangers: An Experiment with Indefinite Interaction

Krannert Working Paper No. 1201

46 Pages Posted: 17 Jul 2007

See all articles by Gabriele Camera

Gabriele Camera

Chapman University - Economic Science Institute; University of Bologna - Dept. of Economics

Marco Casari

Purdue University - Department of Economics

Date Written: May 2007

Abstract

We study the emergence of norms of cooperation in experimental economies populated by strangers interacting indefinitely and lacking formal enforcement institutions. In all treatments the efficient outcome is sustainable as an equilibrium. We address the following questions: can these economies achieve full efficiency? Which institutions for monitoring and enforcement promote cooperation? Finally, what classes of strategies are employed to achieve high efficiency? We find that, first, cooperation can be sustained even in anonymous settings; second, some type of monitoring and punishment institutions significantly promote cooperation; and, third, objects dislike indiscriminate strategies and prefer selective strategies.

Keywords: experiments, repeated games, cooperation, equilibrium selection, prisoners' dilemma, random matching

JEL Classification: C90, C70, D80

Suggested Citation

Camera, Gabriele and Casari, Marco, Cooperation Among Strangers: An Experiment with Indefinite Interaction (May 2007). Krannert Working Paper No. 1201. Available at SSRN: https://ssrn.com/abstract=1000375 or http://dx.doi.org/10.2139/ssrn.1000375

Gabriele Camera (Contact Author)

Chapman University - Economic Science Institute ( email )

Orange, CA 92866
United States

HOME PAGE: http://www1.chapman.edu/~camera/

University of Bologna - Dept. of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Marco Casari

Purdue University - Department of Economics ( email )

West Lafayette, IN 47907-1310
United States
765-494-3598 (Phone)
765-496-1567 (Fax)

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