Repeated Interaction and Its Impact on Cooperation and Surplus Allocation—An Experimental Analysis
Sibilla Di Guida,
The Anh Han,
Tom Lenaerts and
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Sibilla Di Guida: Department of Business and Economics, Faculty of Business and Social Sciences, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark
The Anh Han: School of Computing, Engineering and Digital Technologies, Teesside University, Middlesbrough, Tees Valley TS1 3BX, UK
Tom Lenaerts: Machine Learning Group, Computer Sciences Department, Faculty of Sciences, Université Libre de Bruxelles, Boulevard du Triomphe CP212, 1050 Brussels, Belgium
Ioannis Zisis: Machine Learning Group, Computer Sciences Department, Faculty of Sciences, Université Libre de Bruxelles, Boulevard du Triomphe CP212, 1050 Brussels, Belgium
Games, 2021, vol. 12, issue 1, 1-19
This paper investigates how the possibility of affecting group composition combined with the possibility of repeated interaction impacts cooperation within groups and surplus distribution. We developed and tested experimentally a Surplus Allocation Game where cooperation of four agents is needed to produce surplus, but only two have the power to allocate it among the group members. Three matching procedures (corresponding to three separate experimental treatments) were used to test the impact of the variables of interest. A total of 400 subjects participated in our research, which was computer-based and conducted in a laboratory. Our results show that allowing for repeated interaction with the same partners leads to a self-selection of agents into groups with different life spans, whose duration is correlated with the behavior of both distributors and receivers. While behavior at the group level is diverse for surplus allocation and amount of cooperation, aggregate behavior is instead similar when repeated interaction is allowed or not allowed. We developed a behavioral model that captures the dynamics observed in the experimental data and sheds light into the rationales that drive the agents’ individual behavior, suggesting that the most generous distributors are those acting for fear of rejection, not for true generosity, while the groups lasting the longest are those composed by this type of distributors and “undemanding” receivers.
Keywords: cooperation; surplus distribution; group dissolution; repeated interaction; other-regarding preferences; social dilemma (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jgames:v:12:y:2021:i:1:p:25-:d:510594
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