Working Paper: CEPR ID: DP13809
Authors: Riccardo Ghidoni; Sigrid Suetens
Abstract: 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. 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, 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 prisoners dilemma; strategic uncertainty; experiment
JEL Codes: C70; C90; D70
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| strategic uncertainty (D89) | cooperation rates (C71) |
| incentives to cooperate (C71) | cooperation rates (C71) |
| sequentiality (C32) | strategic uncertainty (D89) |
| cooperation rates (C71) | mutual cooperation in equilibrium (C71) |
| sequentiality (C32) | cooperation rates (C71) |