Working Papers, UC Santa Cruz Economics Department 657
We study prisoner's dilemmas played in continuous time with flow payoffs over 60 seconds. In most cases, the median rate of mutual cooperation rises to 90% or more. Control sessions with 8-time repeated matchings achieve less than half as much cooperation, and cooperation rates approach zero in one-shot control sessions. In follow-up sessions with a variable number of subperiods, cooperation rates increase nearly linearly as the grid size decreases and, with one-second subperiods, they approach the level seen in continuous sessions. Our data support a strand of theory that explains how the capacity to respond rapidly stabilizes cooperation and destabilizes defection in the prisoner's dilemma.
prisoner's dilemma game theory laboratory experiment continuous time game