It Pays to be Nice: The Benefits of Cooperating in Markets

Nina Serdarevic (), Eirik Strømland () and Sigve Tjøtta ()
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Nina Serdarevic: University of Bergen, Department of Economics, Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
Eirik Strømland: University of Bergen, Department of Economics, Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway

No 12/18, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: This paper contributes to the experimental literature by examining the causal effect of partnerchoice opportunities on the earnings of different cooperative types. We first elicit cooperative types and then randomly assign subjects to a repeated prisoner’s dilemma game with either mutual partner choice or random matching. In each round, the individual who fails to attain a partner is excluded from the group. This design allows us to study the causal effect of partner choice on earnings and exclusion. The results from two experiments show that partner choice allows cooperators to outperform free riders, cooperators earn more than free riders, and cooperators are less frequently excluded.

Keywords: cooperation; commitment; partner choice; punishment (search for similar items in EconPapers)
JEL-codes: C91 C92 D02 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2018-09-13
New Economics Papers: this item is included in nep-exp, nep-gth and nep-hpe
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:bergec:2018_012

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