Starting Small: Endogenous Stakes and Rational Cooperation / James Andreoni, Michael A. Kuhn, Larry Samuelson.

Format:

Book

Author/Creator:

Andreoni, James.

Contributor:

National Bureau of Economic Research.

Kuhn, Michael A.

Samuelson, Larry.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21934.

NBER working paper series no. w21934

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Starting Small

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

We report experimental results for a twice-played prisoners' dilemma in which the players can choose the allocation of the stakes across the two periods. Our point of departure is the assumption that some (but not all) people are principled to "do the right thing," or cooperate, as long as their opponent is sufficiently likely to do so. The presence of such types can be exploited to enhance cooperation by structuring the twice-played prisoners' dilemma to "start small," so that the second-stage stakes are larger (but not too much larger) than the first-stage stakes. We compare conditions where the allocation of stakes is chosen exogenously to conditions where it is chosen by the players themselves. We show that players are able to find and choose the payoff maximizing strategy of starting small in a twice-played prisoners' dilemma, and that the salutary payoff effects of doing so are larger than those that arise when the same allocation is exogenously chosen.

Notes:

Print version record

January 2016.