Do upfront investments increase cooperation? A laboratory experiment

Fortuna Casoria and Alice Ciccone ()
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Alice Ciccone: Institute of Transport Economics, Oslo, Norvège

No 1918, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: We investigate whether upfront investments increase cooperation in settings with no enforcement mechanism, where cooperation is not easily sustained voluntarily. Such investments are a cost that individuals incur before deciding whether to cooperate and increase cooperation payoff. We find that cooperation rarely emerges in treatments without investments, while both endogenous and exogenous investments boost overall cooperation levels. For low endogenous investments, cooperation is lower than when the same investments are exogenous. For high investments, cooperation is not significantly different between endogenous and exogenous conditions. This supports low investments being interpreted as a signal of unwillingness to cooperate, triggering non-cooperative choices.

Keywords: KeyCooperation; Upfront investments; Prisoners' dilemma; Experiment (search for similar items in EconPapers)
JEL-codes: C7 C72 C73 C9 C91 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-exp, nep-gth and nep-ore
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ftp://ftp.gate.cnrs.fr/RePEc/2019/1918.pdf (application/pdf)

Related works:
Journal Article: Do upfront investments increase cooperation? A laboratory experiment (2021)
Working Paper: Do upfront investments increase cooperation? A laboratory experiment (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:1918

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