ISSN:
1432-1270
Keywords:
Key words: Experimental economics
;
renegotiation proof equilibria
Source:
Springer Online Journal Archives 1860-2000
Topics:
Mathematics
,
Economics
Notes:
Abstract. This paper reports results of an experiment design ed to investigate the nature of cooperation and punishment. Subjects are matched in a series of two-person, two-stage games with a sequential equilibrium that supports first-stage cooperation with a credible threat of subsequent punishment. Participants sometimes used a consistent punish/reward strategy, and when they did, cooperation rates increased dramatically. The results thus contradict “payoff relevance”: second-stage behavior can be influenced by first-stage outcomes that have no effect on the payoff structure. Nevertheless, high cooperation rates were often not observed, even with a Pareto undominated “punishment” equilibrium in the second stage.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/s001820050100
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