Investing to cooperate: Theory and experiment

Jean-Pierre Benoît, Roberto Galbiati and Emeric Henry

Journal of Economic Behavior & Organization, 2017, vol. 144, issue C, 1-17

Abstract: We study theoretically and in a lab-experiment investment decisions in environments where property rights are absent. In our setting a player chooses an investment level before interacting repeatedly with a given set of agents. The investment stochastically affects the payoffs of the game in every subsequent period. We show that more volatile returns make investment more difficult in the absence of legal protection, and might force the investor to invest more to guarantee cooperation. Experimental results are broadly consistent with the theoretical findings.

Keywords: Investment; Experiments; Repeated games; Property rights (search for similar items in EconPapers)
JEL-codes: C72 C73 C91 C92 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Investing to Cooperate: Theory and Experiment (2014)
Working Paper: Investing to Cooperate: Theory and Experiment (2014)
Working Paper: Investing to Cooperate:Theory and Experiment (2013)
Working Paper: Investing to Cooperate:Theory and Experiment (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:144:y:2017:i:c:p:1-17

DOI: 10.1016/j.jebo.2017.09.011

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