Voluntary Separation as a Disciplinary Device for Long-Term Cooperation: Reconciling Theory with Evidence

Abstract


In this paper, we provide an evidence-based theory to explain how partners forge a cooperative relationship when both parties have the liberty to unilaterally terminate the match. We utilize laboratory methods to gather insights on the evolution of cooperation in a voluntarily separable repeated prisoner’s dilemma game (VSRPD). We observe behavioral patterns that are at odds with out-for-tat (OFT) which, based on the VSRPD literature, is a disciplinary device that helps facilitate mutual cooperation in the long run. Our Pro-Partnership Proposition is formulated to accommodate the observation that human subjects often favor a more forgiving stay-but-act-like-a-stranger move instead of OFT to punish norm violators. A new class of equilibria, called the CoDe-indierent equilibria, is introduced to address the within-match rewards and punishments found in the data.

Time


May 30th, 2019

14:30 ~ 15:30

Speaker


Chun-Lei YANG, Nanjing Audit University

Room


Room 308, School of Information Management & Engineering, Shanghai University of Finance & Economics