Mutual Choice of Partner and Communication in a Repeated Prisoner's Dilemma

Eirik Andre Strømland, Sigve Tjøtta & Gaute Torsvik

Photo: Elsevier

Published in:

Journal of Behavioral and Experimental Economics, Volume 75, August 2018.

DOI: 10.1016/j.socec.2018.05.002

Abstract

Many markets resemble repeated prisoner's dilemma situations with the possibilities for mutual partner choice. In this paper, we show experimentally that partner choice by mutual consent has a strong positive effect on cooperation. Mutual partner choice makes it possible to form long-lasting reciprocal partnerships. To understand partnership formation we also add a treatment where the participants could communicate with each other in a common chat room. Chat transcript reveals that promises are important in forming and sustaining a partnership.

Published Oct. 26, 2018 2:39 PM - Last modified Oct. 26, 2018 2:39 PM