Download this Paper Open PDF in Browser

Which Way to Cooperate

43 Pages Posted: 4 Jun 2007 Last revised: 3 Oct 2011

Todd R. Kaplan

University of Exeter Business School - Department of Economics; University of Haifa - Department of Economics

Bradley J. Ruffle

Wilfrid Laurier University - School of Business & Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 2011

Abstract

We introduce a two-player, binary-choice game in which both players have a privately known incentive to enter, yet the combined surplus is highest if only one enters. Repetition of this game admits two distinct ways to cooperate: turn taking and cutoffs, which rely on the player's private value to entry. A series of experiments highlights the role of private information in determining which mode players adopt. If an individual's entry values vary little (e.g., mundane tasks), taking turns is likely; if these potential values are diverse (e.g., difficult tasks that differentiate individuals by skill or preferences), cutoff cooperation emerges.

Keywords: experimental economics, cooperation, incomplete information, alternating, cutoff strategies, random payoffs

JEL Classification: C90, Z13

Suggested Citation

Kaplan, Todd R. and Ruffle, Bradley J., Which Way to Cooperate (October 2011). Available at SSRN: https://ssrn.com/abstract=990942 or http://dx.doi.org/10.2139/ssrn.990942

Todd R. Kaplan

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Exeter, EX4 4RJ
United Kingdom
+44 13 9226 3237 (Phone)

University of Haifa - Department of Economics

Haifa 31905
Israel

Bradley J. Ruffle (Contact Author)

Wilfrid Laurier University - School of Business & Economics ( email )

Waterloo, Ontario N2L 3C5
Canada

Paper statistics

Downloads
138
Rank
176,477
Abstract Views
1,392