Information Disclosure and Cooperation in a Finitely-repeated Dilemma: Experimental Evidence

Kenju Kamei

MPRA Paper from University Library of Munich, Germany

Abstract: A large volume of theoretical and experimental studies have suggested that making information on people’s past behaviors visible to others may lead to the evolution of cooperation in finitely-repeated environments. But, do people endogenously cooperate with randomly-matched peers by revealing their past when they have an option to hide it? This paper experimentally shows that cooperation does not evolve in a random-matching environment because a large fraction of people do not choose to reveal their past behavior. However, when a costly sorting mechanism (where disclosers are matched with other disclosers; and likewise non-disclosers with other non-disclosers) is present, a stable number of subjects decide to costly disclose their past to join the reputation community and cooperate with other disclosers. Our study at the same time shows that when the sorting process is free, the high efficiency in the reputation community decreases as strategic subjects tend to join the reputation community and attempt to exploit cooperators. These findings suggest an important role of costly sorting mechanisms in the formation of communities (including online platforms) in order for people to sustain a high level of cooperation norms.

Keywords: experiment; cooperation; finitely-repeated dilemma; repeated games; reputation (search for similar items in EconPapers)
JEL-codes: C73 C9 D0 H41 (search for similar items in EconPapers)
Date: 2016-09-25
New Economics Papers: this item is included in nep-cdm, nep-exp, nep-gth and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://mpra.ub.uni-muenchen.de/81210/1/MPRA_paper_81210.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:75100

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