Are Payoff Maximisers More Cooperative? Evidence from a Prisoner's Dilemma Experiment
10 Pages Posted: 31 Mar 2016 Last revised: 25 Oct 2017
Date Written: October 24, 2017
Subjects who played a payoff-maximising strategy against a computer algorithm ("sophisticates") are more cooperative in a finitely repeated Prisoner's Dilemma than subjects who did not play a payoff-maximising strategy ("naifs"). The difference in cooperation rates increases as the subjects gain experience with the game. As a result, sophisticates earn more than naifs, when paired with players of their own type. This finding implies that cooperation in the game is not a result of reasoning fault.
Keywords: Repeated Prisoner's Dilemma, Strategic Sophistication, Bounded Rationality
JEL Classification: C72, C73, C91
Suggested Citation: Suggested Citation