Economic Theory

, Volume 58, Issue 3, pp 441–484 | Cite as

Revealed reputations in the finitely repeated prisoners’ dilemma

  • Caleb A. Cox
  • Matthew T. Jones
  • Kevin E. Pflum
  • Paul J. Healy
Research Article

Abstract

In a sequential-move, finitely repeated prisoners’ dilemma game (FRPD), cooperation can be sustained if the first-mover believes her opponent might be a behavioral type who plays a tit-for-tat strategy in every period. We test this theory by revealing second-mover histories from an earlier FRPD experiment to their current opponent. Despite eliminating the possibility of reputation-building, aggregate cooperation actually increases when histories are revealed. Cooperative histories lead to increased trust, but negative histories do not cause decreased trust. We develop a behavioral model to explain these findings.

Keywords

Prisoners’ dilemma Finitely repeated games Cooperation  Reputation-building 

JEL Classification

C70 C73 C92 

Notes

Acknowledgments

The authors thank Yaron Azrieli, Lucas Coffman, Glenn Dutcher, John Kagel, Semin Kim, Peter McGee, Xiangyu Qu, Arno Riedl, Dan Schley, Mike Sinkey, Tom Wilkening, and Chao Yang for their helpful comments and conversations. We are also grateful to two anonymous referees whose comments and insights have helped us to significantly improve the paper. Healy acknowledges financial support from National Science Foundation Grant #SES-0847406. Any opinions, findings, conclusions, or recommendations expressed are those of the authors and do not necessarily reflect the views of the Federal Trade Commission.

Supplementary material

199_2015_863_MOESM1_ESM.pdf (451 kb)
Supplementary material 1 (pdf 450 KB)

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  • Caleb A. Cox
    • 1
  • Matthew T. Jones
    • 2
  • Kevin E. Pflum
    • 3
  • Paul J. Healy
    • 4
  1. 1.Durham University Business SchoolDurhamUK
  2. 2.Federal Trade CommissionWashingtonUSA
  3. 3.University of AlabamaTuscaloosaUSA
  4. 4.The Ohio State UniversityColumbusUSA

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