Mixed Strategies in the Indefinitely Repeated Prisoner's Dilemma

Julian Romero and Yaroslav Rosokha

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

Abstract: Identifying the strategies that are played is critical to understanding behavior in repeated games. This process is dicult because only choices (not strategies) are observable. Recently, a debate has emerged regarding whether subjects play mixed strategies in the indefinitely repeated prisoner's dilemma. We use an experimental approach to elicit mixed strategies from human subjects, thereby providing direct empirical evidence. We find that a majority of subjects use mixed strategies. However, the data also suggest subjects' strategies are becoming less mixed over time, and move toward three focal pure strategies: Tit-For-Tat, Grim-Trigger, and Always Defect. We use the elicited strategies to provide an empirically-relevant foundation for analyzing commonly used mixture model estimation procedures.

Keywords: Indefinitely Repeated Prisoner's Dilemma; Mixed Strategies; Experimental Design; Strategy Elicitation; Finite Mixture Models (search for similar items in EconPapers)
Pages: 57 pages
Date: 2023-01
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Persistent link: https://EconPapers.repec.org/RePEc:pur:prukra:1347

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