Monitoring Institutions in Indefinitely Repeated Game
Quaderni - Working Paper DSE N° 1046
25 Pages Posted: 23 Dec 2015
Date Written: December 22, 2015
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: Suggested Citation