Breakdown of Cooperation in Iterative Real-Time Trust Dilemmas

20 Pages Posted: 16 Oct 2004 Last revised: 22 Jul 2008

See all articles by Ryan O. Murphy

Ryan O. Murphy

University of Zurich - Department of Economics

Amnon Rapoport

University of Arizona - Eller College of Management

James E. Parco

Colorado College

Multiple version iconThere are 2 versions of this paper

Date Written: December 22, 2003

Abstract

We study a class of trust dilemmas with symmetric players that evolve in real-time. In these games, as long as all the n players continue to cooperate, the payoff function increases exponentially over time. Simultaneously, however, the temptation to defect also increases at the same rate. The first player to defect receives the present value of the payoff function whereas each of the other n-1 players only receives a fraction d of that player's payoff. We report the results of an iterated trust dilemma that varies the values of n and d in a between-subjects design. In all cases, trust-based cooperation breaks down in the population over iterations of the stage game with the rate of breakdown sharply increasing in n and slowly decreasing in d.

Keywords: Centipede game, population dynamics, cooperation, trust dilemmas

JEL Classification: C72, C92, D81

Suggested Citation

Murphy, Ryan O. and Rapoport, Amnon and Parco, Jim, Breakdown of Cooperation in Iterative Real-Time Trust Dilemmas (December 22, 2003). Experimental Economics, Vol. 9, pp. 147-166, 2006. Available at SSRN: https://ssrn.com/abstract=605268 or http://dx.doi.org/10.2139/ssrn.605268

Ryan O. Murphy (Contact Author)

University of Zurich - Department of Economics ( email )

Z├╝rich
Switzerland

Amnon Rapoport

University of Arizona - Eller College of Management ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States
520-621-9325 (Phone)
520-621-4171 (Fax)

Jim Parco

Colorado College ( email )

Department of Economics and Business
14 E. Cache la Poudre St.
Colorado Springs, CO 80903
United States
719-389-6416 (Phone)
719-389-6927 (Fax)

HOME PAGE: http://www.coloradocollege.edu/dept/EC/parco.asp

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