Cooperation under the Shadow of the Future: Experimental Evidence from Infinitely Repeated Games
Year: 2005
Type: article
Abstract: While there is an extensive literature on the theory of infinitely repeated games, empirical evidence on how “the shadow of the future” affects behavior is scarce and inconclusive. I simulate infinitely repeated prisoner's dilemma games in the lab with a random continuation rule. The experimental design represents an improvement over the existing literature by including sessions with finite repeated games as controls and a large number of players per session (which allows for learning without contagion effects). I find that the shadow of the future matters not only by significantly reducing opportunistic behavior, but also because its impact closely follows theoretical predictions.
Source: American Economic Review
Author: Pedro Dal Bó
Institution: Brown University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3123335860