Endogenous Monitoring through Gossiping in an Infinitely Repeated Prisoner’s Dilemma Game: Experimental Evidence

Kenju Kamei and Artem Nesterov ()
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Artem Nesterov: Durham University Business School

No 2020_02, Department of Economics Working Papers from Durham University, Department of Economics

Abstract: Exogenously given reputational information is known to improve cooperation. This paper experimentally studies how people create such information through reporting of partner’s action choices, and whether the endogenous monitoring helps sustain cooperation, in an indefinitely repeated prisoner’s dilemma game. The experiment results show that most subjects report their opponents’ action choices, thereby successfully cooperating with each other, when reporting does not involve a cost. However, subjects are strongly discouraged from reporting when doing so is costly. As a result, they fail to achieve strong cooperation norms when the reported information is privately conveyed only to their next-round interaction partner. Costly reporting occurs only occasionally, even when there is a public record whereby all future partners can check the reported information. However, groups can then foster cooperation norms aided by the public record, because reported information gets gradually accumulated and becomes more informative over time. These findings suggest that the efficacy of endogenous monitoring depends on the quality of platforms that store reported information.

Keywords: experiment; cooperation; prisoner’s dilemma game; reputation; reporting; infinitely repeated game. (search for similar items in EconPapers)
JEL-codes: C73 C92 D70 H41 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp and nep-gth
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Endogenous Monitoring through Gossiping in an Infinitely Repeated Prisoner’s Dilemma Game: Experimental Evidence (2020)
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