Empirical Evidence on Repeated Sequential Games
CentER Discussion Paper Series No. 2019-016
61 Pages Posted: 23 May 2019
Date Written: May 6, 2019
Sequentiality of moves in an infinitely repeated prisoner’s dilemma does not change the conditions under which mutual cooperation can be supported in equilibrium as compared to simultaneous decision-making. The nature of the interaction is different, however, given that the second mover in a sequential-move game does not face strategic uncertainty in the stage game. We study in an experiment whether sequentiality has an effect on cooperation rates. We find that with intermediate incentives to cooperate, sequentiality increases cooperation rates by around 40 percentage points after learning, whereas with very low or high incentives to cooperate, cooperation rates are respectively very low or high in both settings.
Keywords: cooperation, infinitely repeated game, sequential prisoner’s dilemma, strategic uncertainty, experiment
JEL Classification: C70, C90, D70
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