Monitoring Institutions in Indefinitely Repeated Game

Quaderni - Working Paper DSE N° 1046

25 Pages Posted: 23 Dec 2015

See all articles by Gabriele Camera

Gabriele Camera

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

Marco Casari

University of Bologna - Department of Economics

Date Written: December 22, 2015

Abstract

Does monitoring past conduct facilitate intertemporal cooperation? We designed an experiment characterized by strategic uncertainty and multiple equilibria where coordinating on the efficient outcome is a challenge. Participants, interacting anonymously in a group, could pay a cost either to obtain information about their counterparts, or to create a freely available public record of individual conduct. Both monitoring institutions were actively employed. However, groups were unable to attain higher levels of cooperation compared to a treatment without monitoring. Information about past conduct alone thus appears to be ineffective in overcoming coordination challenges.

Keywords: coordination, information, equilibrium selection, conventions, social dilemmas

JEL Classification: C70, C90, D80

Suggested Citation

Camera, Gabriele and Casari, Marco, Monitoring Institutions in Indefinitely Repeated Game (December 22, 2015). Quaderni - Working Paper DSE N° 1046. Available at SSRN: https://ssrn.com/abstract=2707095 or http://dx.doi.org/10.2139/ssrn.2707095

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

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

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