Economics at your fingertips  

Extortion in the laboratory

Friedel Bolle, Yves Breitmoser () and Steffen Schlächter

Post-Print from HAL

Abstract: In a laboratory experiment, we study a finitely repeated game (T=15) under complete information. In each round, P demands tribute (cash transfer) from A, A complies or refuses, and after refusals P may punish A. In equilibrium (payoff maximization), P does not punish and A refuses any positive demand. In the experiment, P punishes increasingly often and increasingly severely as she gains experience; most As comply with P's demands. The observations are compatible with linear spite. In a finite mixture model, the types of P and A in the subject pool are characterized. An A that is resistant to extortion (declines all demands) is very rare, and hence the threat of punishment in general is effective, but all As either ignore actual punishment or react negatively to it. They accept to pay tribute but they are resistant to piecemeal expropriation.

Keywords: C72; C91; D74; laboratory experiment; mafia; extortion; punishment; finitely repeated game (search for similar items in EconPapers)
Date: 2011-05-12
Note: View the original document on HAL open archive server:
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Published in Journal of Economic Behavior and Organization, Elsevier, 2011, 78 (3), pp.207. ⟨10.1016/j.jebo.2011.01.005⟩

Downloads: (external link) (application/pdf)

Related works:
Journal Article: Extortion in the laboratory (2011) Downloads
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:

DOI: 10.1016/j.jebo.2011.01.005

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

Page updated 2020-06-25
Handle: RePEc:hal:journl:hal-00989521