Cooperation among strangers: an experiment with indefinite interaction

Gabriele Camera () and Marco Casari

Purdue University Economics Working Papers from Purdue University, Department of Economics

Abstract: We study the emergence of norms of cooperation in experimental economies populated by strangers interacting indefinitely and lacking formal enforcement institutions. In all treatments the efficient outcome is sustainable as an equilibrium. We address the following questions: can these economies achieve full efficiency? Which institutions for monitoring and enforcement promote cooperation? Finally, what classes of strategies are employed to achieve high efficiency? We find that, first, cooperation can be sustained even in anonymous settings; second, some type of monitoring and punishment institutions significantly promote cooperation; and, third, subjects dislike indiscriminate strategies and prefer selective strategies.

Keywords: experiments; repeated games; cooperation; equilibrium selection; prisoners’ dilemma; random matching (search for similar items in EconPapers)
JEL-codes: C70 C92 D44 D51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-gth and nep-soc
Date: Written
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Persistent link: http://EconPapers.repec.org/RePEc:pur:prukra:1201

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