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Title:Do the selfish mimic cooperators? Experimental evidence from finitely-repeated labor markets PDF Logo
Authors:Roe, Brian E.
Wu, Steven Y.
Issue Date:2009
Series/Report no.:IZA discussion papers 4084
Abstract:Experimental studies have consistently shown that cooperative outcomes can emerge even in finitely repeated games. Such outcomes are justified by existing reputation building models, which suggest that cooperative outcomes can be sustained if some subjects have other-regarding preferences. While the existence of other-regarding preferences is typically used to justify experimental outcomes, we are unaware of empirical studies that explicitly examine the interaction between cooperators (those with other-regarding preferences) and selfish subjects in sustaining cooperation. In this paper, we classify subjects as either selfish or cooperative using simple social preference games and then test for behavioral differences between the two types in a finitely-repeated labor market with unenforceable worker effort. Theory predicts, and our data confirms, that (1) selfish players mimic the actions of cooperators when trading partners can track the individual reputation of past partners and (2) selfish and cooperative types act differently when individual reputations cannot be tracked.
Subjects:Contracts
relational contracts
implicit contracts
market interaction
experimental economics
repeated transaction
social preferences
reputation
firm latitude
finitely-repeated games
JEL:C91
D31
D86
K12
Persistent Identifier of the first edition:urn:nbn:de:101:1-20090330172
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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