On the Determinants of Cooperation in Infinitely Repeated Games: A Survey

Abstract

There have been major advances in the theoretical study of the determinants of cooperation with many applications in economics and the social sciences. A growing experimental literature has studied the determinants of cooperation, tested different predictions of the theory, and suggested an empirical solution to the problem of multiple equilibria in infinitely repeated games. To provide a robust description of the literature’s findings, we gather and analyze a meta-data set of experiments on infinitely repeated prisoners’ dilemma games. The experimental data shows that cooperation is affected by infinite repetition and that cooperation 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 only emerge 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.

Keywords: Infinitely Repeated Games, Experiments, Social Dilemmas, Prisoner's Dilemma

JEL Classification: C07, C09