Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265713 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15492
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We aim to understand the role and evolution of beliefs in the indefinitely repeated prisoner's dilemma (IRPD). To do so, we elicit beliefs about the supergame strategies chosen by others. We find that heterogeneity in beliefs and changes in beliefs with experience are central to understanding behavior and learning in the IRPD. Beliefs strongly predict cooperation, initial beliefs match behavior quite well, most subjects choose strategies that perform well given their beliefs, and beliefs respond to experience while becoming more accurate over time. Finally, we uncover a novel mechanism whereby trusting subjects learn to cooperate through their interaction with experience.
Subjects: 
infinitely repeated prisoner's dilemma
cooperation
optimism
belief elicitation
supergame strategies
experimentation
trust
experiment
JEL: 
C72
C73
C91
D91
Document Type: 
Working Paper

Files in This Item:
File
Size
5.99 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.