Inequity Aversion and Limited Foresight in the Repeated Prisoner’s Dilemma

Backhaus T, Breitmoser Y (2021) Center for Mathematical Economics Working Papers; 652.
Bielefeld: Center for Mathematical Economics.

Diskussionspapier | Veröffentlicht | Englisch
 
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Backhaus, Teresa; Breitmoser, YvesUniBi
Abstract / Bemerkung
Reanalyzing 12 experiments on the repeated prisoner’s dilemma (PD), we robustly observe three distinct subject types: defectors, cautious cooperators and strong cooperators. The strategies used by these types are surprisingly stable across experiments and uncorrelated with treatment parameters, but their population shares are highly correlated with treatment parameters. As the discount factor increases, the shares of defectors decrease and the relative shares of strong cooperators increase. Structurally analyzing behavior, we next find that subjects have limited foresight and assign values to all states of the supergame, which relate to the original stage-game payoffs in a manner compatible with inequity aversion. This induces the structure of coordination games and approximately explains the strategies played using Schelling’s focal points: after (*c;c*) subjects play according to the coordination game’s cooperative equilibrium, after (*d;d*) they play according to its defective equilibrium, and after (*c;d*) or (*d;c*) they play according to its mixed equilibrium.
Stichworte
Repeated game; Behavior; Tit-for-tat; Mixed strategy; Memory; Belief-free equilibrium; Laboratory experiment
Erscheinungsjahr
2021
Serientitel
Center for Mathematical Economics Working Papers
Band
652
Seite(n)
107
ISSN
0931-6558
Page URI
https://pub.uni-bielefeld.de/record/2956939

Zitieren

Backhaus T, Breitmoser Y. Inequity Aversion and Limited Foresight in the Repeated Prisoner’s Dilemma. Center for Mathematical Economics Working Papers. Vol 652. Bielefeld: Center for Mathematical Economics; 2021.
Backhaus, T., & Breitmoser, Y. (2021). Inequity Aversion and Limited Foresight in the Repeated Prisoner’s Dilemma (Center for Mathematical Economics Working Papers, 652). Bielefeld: Center for Mathematical Economics.
Backhaus, T., and Breitmoser, Y. (2021). Inequity Aversion and Limited Foresight in the Repeated Prisoner’s Dilemma. Center for Mathematical Economics Working Papers, 652, Bielefeld: Center for Mathematical Economics.
Backhaus, T., & Breitmoser, Y., 2021. Inequity Aversion and Limited Foresight in the Repeated Prisoner’s Dilemma, Center for Mathematical Economics Working Papers, no.652, Bielefeld: Center for Mathematical Economics.
T. Backhaus and Y. Breitmoser, Inequity Aversion and Limited Foresight in the Repeated Prisoner’s Dilemma, Center for Mathematical Economics Working Papers, vol. 652, Bielefeld: Center for Mathematical Economics, 2021.
Backhaus, T., Breitmoser, Y.: Inequity Aversion and Limited Foresight in the Repeated Prisoner’s Dilemma. Center for Mathematical Economics Working Papers, 652. Center for Mathematical Economics, Bielefeld (2021).
Backhaus, Teresa, and Breitmoser, Yves. Inequity Aversion and Limited Foresight in the Repeated Prisoner’s Dilemma. Bielefeld: Center for Mathematical Economics, 2021. Center for Mathematical Economics Working Papers. 652.
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2021-08-24T08:43:28Z
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