Cooperation over Finite Horizons: A Theory and Experiments
This paper shows that the presence of different types of players { those who only care abouttheir own material payoffs and those who reciprocate others' contributions { can explain the robustfeatures of observed contribution patterns in public good contribution games, even without thepresence of asymmetric information. We show what conditions on reciprocity are sufficient for aunique perfect equilibrium, in which contributions are decreasing. Under these conditions, selfishplayers have enough future benefits to induce subsequent contributions by reciprocal players, andthis incentive diminishes as the end of the game approaches. The model explains the puzzlingrestart effect and is consistent with various other empirical findings. We also report the results of a series of experiments, using a probabilistic continuation design in which after each set of 10-period games, the group is restarted with low probability. We find specfic support for the theory in our data, including that selfish players (identified exogenously) stop contributing earlier than reciprocal players, as directly implied by the model.
Year of publication: |
2010-09
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Authors: | Ambrus, Attila ; Pathak, Parag |
Publisher: |
Elsevier B.V. |
Saved in:
freely available
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