Cooperation in an Overlapping Generations Experiment |
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Authors: | Theo Offerman Jan Potters Harrie A A Verbon |
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Institution: | Department of Economics/CREED, University of Amsterdam, 1018 WB, Amsterdam, The Netherlandsf1;b CentER/Department of Economics, Tilburg University, 5000 LE, Tilburg, The Netherlands |
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Abstract: | Recent theoretical work shows that folk theorems can be developed for infinite overlapping generations games. Cooperation in such games can be sustained as a Nash equilibrium. But, of course, there are other equilibria. This paper investigates experimentally whether cooperation actually occurs in a simple overlapping generations game. Subjects both play the game and formulate strategies. Our main finding is that subjects fail to exploit the intertemporal structure of the game. Even when we provided subjects with a recommendation to play the grim trigger strategy, most of the subjects still employed safe history-independent strategies. Journal of Economic Literature Classification Numbers: C72, C92, D90. |
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Keywords: | overlapping generations cooperation trigger strategies experiments |
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