Time to Defect: Repeated Prisoners' Dilemma Experiments with Uncertain Horizon

Lisa Bruttel, Werner Güth (gueth@coll.mpg.de) and Ulrich Kamecke

No 2007-098, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Using a symmetric 2-person prisoners' dilemma as the base game, each player receives a signal for the number of rounds to be played with the same partner. The actual number of rounds (the length of the supergame) is determined by the maximal signal where each player expects the other's signal to be smaller, respectively larger, by a fixed number of rounds with 50% probability. In the tradition of Folk Theorems we show that both, mutual defection and mutual cooperation until the individually perceived last round, are subgame perfect equilibrium outcomes. We find experimental evidence that many players do in fact cooperate beyond their individual signal period.

Keywords: Prisoners' dilemma; Continuation probability; Uncertainty; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D82 D84 (search for similar items in EconPapers)
Date: 2007-12-04
New Economics Papers: this item is included in nep-exp and nep-gth
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Citations: View citations in EconPapers (1)

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