Play it Again: Partner Choice, Reputation Building and Learning in Restarting, Finitely-Repeated Dilemma Games

Abstract

Previous research has shown that opportunities for two-sided partner choice in finitely repeated social dilemma games can promote cooperation through a combination of sorting and opportunistic signaling, with late period defections by selfish players causing an end-game decline. How such experience would affect play of subsequent finitely-repeated games remains unclear. In each of six treatments that vary the cooperation premium and the informational basis for reputation formation, we let sets of subjects play sequences of finitely-repeated voluntary contribution games to study the competing forces of (a) learning about the benefits of reputation, and (b) learning about backward unraveling. We find, inter alia, that with a high cooperation premium and good information, investment in reputation grows across sets of finitely-repeated games.

Keywords: cooperation, reputation, voluntary contribution, public goods, sorting, endogenous grouping, group formation, experiment

JEL Classification: C92, D74, D83, H41