Friend or Foe? A Natural Experiment of the Prisoner's Dilemma

Abstract

This study examines data drawn from the game show Friend or Foe?, which is similar to the classic prisoner's dilemma tale: partnerships are endogenously determined, players work together to earn money, after which, they play a one-shot prisoner's dilemma game over large stakes: varying from $200 to (potentially) more than $22,000. If one were to conduct such an experiment in the laboratory, the cost to gather the data would be well over $350,000. The data reveal several interesting insights; perhaps most provocatively, they suggest that even though the game is played in front of an audience of millions of viewers, there is some evidence consistent with a model of discrimination. The observed patterns of social discrimination are unanticipated, however. For example, there is evidence consistent with the notion that certain populations have a general "distaste" for older participants.