We find that contrary to common perception, cooperation as equilibrium of the infinitely repeated discounted prisoner's dilemma is in many relevant cases not very plausible, or at least questionable: for a significant subset of the payoff-discount factor parameter space cooperation equilibria...

We test infinitely repeated prisoner's dilemma games with random continuation in the laboratory to capture the effect of strategic risk on co-operation. We propose a criterion building on Harsanyi and Selten's (1988) risk dominance concept and motivate it by three heuristic principles. Our...

We propose a general framework for analyzing and comparing ownership structures with respect to creating incentives for co-operative behavior (e.g. efficient investment) in long-run relationships. We generalize models by Garvey (1995), Halonen (2002), and Baker, Gibbons and Murphy (2002) and...

We find that - contrary to common perception - co-operation as equilibrium of the infinitely repeated discounted Prisoner's Dilemma is in many relevant cases not very plausible: For a significant subset of the payoff-discount factor parameter space, all co-operation equilibria are strictly risk...