The approval mechanism solves the prisoner's dilemma theoretically and experimentally

Tatsuyoshi Saijo (), Yoshitaka Okano () and Takafumi Yamakawa
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Tatsuyoshi Saijo: School of Economics and Management, Kochi University of Technology
Yoshitaka Okano: School of Economics and Management, Kochi University of Technology
Takafumi Yamakawa: Osaka University

No SDES-2015-12, Working Papers from Kochi University of Technology, School of Economics and Management

Abstract: Consider a situation where players in a prisoner's dilemma game can approve or reject the other's choice such as cooperation or defection. If both players approve the other's choice, the outcome is the one they chose, whereas if either one rejects the other's choice, the outcome is the one when both defect, which we name the approval mechanism herein (this is inspired by the Cold War doctrine of mutually assured destruction). Experimentally, we find that the cooperation rate with the approval mechanism is 90% in round one and averages 93.2% across the 19 rounds. The questionnaire analysis also allows us to find that subjects' behavior is consistent with subgame perfect elimination of weakly dominated strategies (SPEWDS) rather than Nash equilibrium (NE) or subgame perfect Nash equilibrium (SPNE) behavior. Theoretically, this mechanism implements cooperation in SPEWDS, but not in NE or SPNE.

Keywords: prisoner’s dilemma; approval mechanism; mutually assured destruction; cooperation; subgame perfect elimination of weakly dominated strategies; experiment (search for similar items in EconPapers)
JEL-codes: C72 C73 C92 D74 P43 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2015-02, Revised 2015-02
New Economics Papers: this item is included in nep-exp, nep-gth, nep-hpe and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in SDE Series, February 2015, pages 1-61

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Persistent link: https://EconPapers.repec.org/RePEc:kch:wpaper:sdes-2015-12

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