Do the Selfish Mimic Cooperators? Experimental Evidence from Finitely-Repeated Labor Markets

35 Pages Posted: 21 Mar 2009

See all articles by Brian E. Roe

Brian E. Roe

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics

Steven Y. Wu

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 20, 2009

Abstract

Experimental studies have consistently shown that cooperative outcomes can emerge even in finitely repeated games. Such outcomes are justified by existing reputation building models, which suggest that cooperative outcomes can be sustained if some subjects have other-regarding preferences. While the existence of other-regarding preferences is typically used to justify experimental outcomes, we are unaware of empirical studies that explicitly examine the interaction between cooperators (those with other-regarding preferences) and selfish subjects in sustaining cooperation. In this paper, we classify subjects as either selfish or cooperative using simple social preference games and then test for behavioral differences between the two types in a finitely-repeated labor market with unenforceable worker effort. Theory predicts, and our data confirms, that (1) selfish players mimic the actions of cooperators when trading partners can track the individual reputation of past partners and (2) selfish and cooperative types act differently when individual reputations cannot be tracked.

Keywords: Contracts, relational contracts, implicit contracts, market interaction, experimental economics, repeated transaction, social preferences, reputation, firm latitude, finitely-repeated games

JEL Classification: C91, D31, D86, K12

Suggested Citation

Roe, Brian E. and Wu, Steven Yu-Ping, Do the Selfish Mimic Cooperators? Experimental Evidence from Finitely-Repeated Labor Markets (March 20, 2009). Available at SSRN: https://ssrn.com/abstract=1365958 or http://dx.doi.org/10.2139/ssrn.1365958

Brian E. Roe (Contact Author)

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics ( email )

2120 Fyffe Rd
Columbus, OH 43210-1067
United States
614-688-5777 (Phone)

HOME PAGE: http://https://aede.osu.edu/our-people/brian-e-roe

Steven Yu-Ping Wu

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics ( email )

2120 Fyffe Rd
Columbus, OH 43210-1067
United States
614-247-7494 (Phone)

HOME PAGE: http://www-agecon.ag.ohio-state.edu/people/display.cfm?User_ID=wu412

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
30
Abstract Views
522
PlumX Metrics