Far but finite horizons promote cooperation in the Centipede game

Eva M. Krockow, Briony Pulford and Andrew M. Colman

Journal of Economic Psychology, 2018, vol. 67, issue C, 191-199

Abstract: The sequential Centipede game models repeated reciprocal interaction, in which two players alternate in choosing between cooperation and defection. In an attempt to increase the game’s applicability to real-life decision contexts, we investigated the effects of game length and termination rules on cooperation in the Centipede game. We found that increasing the game length from 8 to 20 decision nodes increased cooperation, but only if the game’s end was known to participants. Games with unknown ends manifested lower cooperation levels without an endgame effect (increased defection immediately before a known end). Random game termination by the computer appeared to increase the percentage of games adhering to the Nash equilibrium outcome mandated by game theory, and generally lowered cooperation levels.

Keywords: Centipede game; Backward induction; Endgame effect; Cooperation; Reciprocity (search for similar items in EconPapers)
JEL-codes: C72 C92 D03 D74 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:67:y:2018:i:c:p:191-199

DOI: 10.1016/j.joep.2018.07.002

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