Deterministic and Stochastic Prisoner's Dilemma Games: Experiments in Interdependent Security

Howard Kunreuther, Gabriel Silvasi, Eric T. Bradlow and Dylan Small

No 341, NBER Technical Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines experiments on interdependent security prisoner's dilemma games with repeated play. By utilizing a Bayesian hierarchical model, we examine how subjects make investment decisions as a function of their previous experience and their treatment condition. Our main findings are that individuals have differing underlying propensities to invest that vary across time, are affected by both the stochastic nature of the game and even more so by an individual's ability to learn about his or her counterpart's choices. Implications for individual decisions and the likely play of a person's counterpart are discussed in detail.

JEL-codes: C11 C12 C22 C23 C73 C91 (search for similar items in EconPapers)
Date: 2007-08
New Economics Papers: this item is included in nep-exp and nep-gth
Note: TWP
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