Theory and Decision

, Volume 54, Issue 3, pp 207-229

First online:

Multiple Prisoner's Dilemma Games with(out) an Outside Option: an Experimental Study

  • Esther HaukAffiliated withDepartment of Economics and Business, Universitat Pompeu Fabra

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Experiments in which subjects play simultaneously several finite two-person prisoner's dilemma supergames with and without an outside option reveal that: (i) an attractive outside option enhances cooperation in the prisoner's dilemma game, (ii) if the payoff for mutual defection is negative, subjects' tendency to avoid losses leads them to cooperate; while this tendency makes them stick to mutual defection if its payoff is positive, (iii) subjects use probabilistic start and endeffect behavior.

Prisoner's dilemma Cooperation Exit Experiments Loss aversion