Patience or Fairness? Analyzing Social Preferences in Repeated Games

John Duffy and Felix Munoz-Garcia

No 2009-12, Working Papers from School of Economic Sciences, Washington State University

Abstract: This paper investigates how the introduction of social preferences affects players’ equilibrium behavior in both one-shot and infinitely repeated versions of the Prisoner’s Dilemma game. We first show that defection survives as the unique equilibrium of the stage game if at least one player is not too concerned about inequity aversion. Second, we demonstrate that in the infinitely repeated version of the game, fairness concerns operate as a “substitute: for time discounting, as fairness helps sustain cooperation for lower discount factors. We then extend our results to more general simultaneous-move games, and more general preferences. Furthermore, we examine how the introduction of incomplete information about players’ social preferences can help in the selection of the efficient cooperative outcome. Finally, we point out the implications of our findings for the design and analysis of experiments involving repeated games. In particular, repeated game equilibria which are thought to be supported by sufficiently large discount factors, may in fact be sustained by a combination of discounting and social preference parameters, an observation that may help rationalize recent experimental findings.

Keywords: Prisoner’s dilemma; Repeated games; Inequity aversion; Time discounting; Time discounting; Social Preferences (search for similar items in EconPapers)
JEL-codes: C72 C73 D91 H43 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2009-05
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-gth and nep-hpe
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://faculty.ses.wsu.edu/WorkingPapers/Munoz/WP2009-12.pdf First version, 2009 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://faculty.ses.wsu.edu/WorkingPapers/Munoz/WP2009-12.pdf [307 Temporary Redirect]--> https://ses.wsu.edu/faculty/)

Related works:
Journal Article: Patience or Fairness? Analyzing Social Preferences in Repeated Games (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsu:wpaper:munoz-4

Access Statistics for this paper

More papers in Working Papers from School of Economic Sciences, Washington State University Contact information at EDIRC.
Bibliographic data for series maintained by Danielle Engelhardt ().