The paper presents the results of a novel experiment testing the effects of environment complexity on strategic behavior, using a centipede game. Behavior in the centipede game has been explained either by appealing to failures of backward induction or by calling for preferences that induce...

We aim to understand the role and evolution of beliefs in the indefinitely repeated prisoner’s dilemma (IRPD). To do so, we elicit beliefs about the supergame strategies chosen by others. We find that heterogeneity in beliefs and changes in beliefs with experience are central to understanding...

In an experiment on the repeated prisoner s dilemma where intended actions are implemented with noise, Fudenberg et al. (2012) observe that non-equilibrium strategies of the "tit-for-tat" family are largely adopted. Furthermore, they do not find support for risk dominance of TFT as a determinant...

While there is an extensive literature on the theory of infinitely repeated games, empirical evidence on how %22the shadow of the future%22 affects behavior is scarce and inconclusive. We simulate infinitely repeated prisoner's dilemma games in the lab by having a random continuation rule. The...

We provide tight bounds on the rate of convergence of the equilibrium payoff sets for repeated games under both perfect and imperfect public monitoring. The distance between the equilibrium payoff set and its limit vanishes at rate (1 - delta)^{1/2} under perfect monitoring, and at rate (1 -...

The traditional mechanism of finding Nash equilibria presumes that economic actors are capable of performing computations which even computers would take far too long to perform. A decentralized and parallel process of interactions between simple economic actors is presented as a more plausible...

Asymmetric information can help achieve an efficient equilibrium in repeated coordination games. If there is a small probability that one player can play only one of a continuum of moves, that player can pretend to be of the constrained type and other players will coordinate with him. This hurts...

A repeated game is where the stage game is repeated a number of times – the number of repetitions could be finite or infinite. We usually assume that (a) the stage game has a finite number of players, (b) for each player, the set of feasible actions for the stage game is finite, and (c) the...

This paper examines sequential equilibria of repeated games with private monitoring where signals are generally distributed. Assuming full dimensionality of payoffs and identifiability conditions of signals, we focus on games with finite stage-game actions and signals. We can construct a...

Case studies of cartels and recent theory suggest that repeated communication is key for stable cooperation in environments where signals about others' actions are noisy. However, empirically the exact role of communication is not well understood. We study cooperation under different monitoring...