Abstract
Investigates hostage posting institutionas a mechanism of co-operation in the two-person Prisoner’sDilemma Game. Game-theoretic conditions are specified that are necessary to boost co-operative behaviour, and the role of transaction costs and bonuses (productive hostages) is discussed. An experiment is reported (N=216) that shows that games characterised by the Nash equilibrium or subgame-perfect equilibrium create conditions that are necessary but not sufficient to encourage actors to post a hostage, while games in which the maximin criterion is met ensure mutual hostage posting and co-operation. While transaction costs significantly discourage subjects from taking advantage of the hostage posting institution, productive hostages do not influence subjects’ co-operative behaviour.
I am grateful to Werner Raub, Manuel Vree and Jeroen Weesie for their help at designing and conducting the experiment, and for their helpful comments in revising the manuscript. Financial support was provided by the Netherlands Organization for Scientific Research (NWO) under grant PGS 50-370.
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Mlicki, P.P. (1996). Hostage Posting as a Mechanism for Co-operation in the Prisoner’s Dilemma Game. In: Liebrand, W.B.G., Messick, D.M. (eds) Frontiers in Social Dilemmas Research. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-85261-9_10
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