Cooperation in Reciprocity Games and in the Voluntary Contributions Mechanism

Citation

Prisbrey, Jeffrey Emig (1993) Cooperation in Reciprocity Games and in the Voluntary Contributions Mechanism. Dissertation (Ph.D.), California Institute of Technology. doi:10.7907/vrc7-jr64. https://resolver.caltech.edu/CaltechTHESIS:01022013-140803168

Abstract

Each of the three independent chapters of this dissertation examines or justifies cooperative behavior in one of two specific public goods environments.

The first chapter presents experimental evidence documenting a subject's behavior when faced with simple games that require turn taking for efficiency. Both symmetric and asymmetric games as well as games with explicit punishment actions are studied and compared. The length of the game is a treatment variable; experiments simulating one-shot, finite and infinite repetition games are conducted. Group outcomes are sorted by the player's average payoffs and the importance of focal solution concepts like group welfare, equality, and symmetry are inferred. Individual strategies used in the experiments are also sorted and compared enabling a discussion of endgame effects and conflict within the games.

Standard non-cooperative game theory is not selective enough to discriminate among many of the possible outcomes of the games examined in Chapter One. Relying on focal and axiomatic solution concepts allows discrimination, yet these procedures are inherently ad-hoc. The second chapter examines the outcome to a population game with evolutionary dynamics in order to theoreticly justify the results of the first chapter in a less ad-hoc manner. In particular, the second chapter applies the Replicator Dynamic. It is shown that under an assumption of limited rationality, specifically limited memory, there is a unique global equilibrium. The unique equilibrium contains a trio of outcomes: non-cooperative Nash play, payoff irrational play, and cooperative turn-taking.

The third chapter presents findings from a second series of experiments, a series designed to study free riding and the voluntary contribution mechanism. In the experimental environment, subjects arc randomly assigned constant marginal rates of substitution between the public and the private good. These random assignments arc changed each decision period, allowing the measurement of player response functions. These response functions are analogous to the bidding functions obtained in private good, sealed-bid auction experiments. The results are quite different from the results of others in environments with little or no heterogeneity. There is much more free riding, very little evidence of decay across periods, and only sparse evidence of anomalous behavior such as splitting and spite.

Thesis Files