Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98443
Authors: 
Crosetto, Paolo
Gaudeul, Alexia
Riener, Gerhard
Year of Publication: 
2014
Series/Report no.: 
Jena Economic Research Papers 2014-012
Abstract: 
We explore in an experiment what leads to the breakdown of partnerships. Subjects are assigned a partner and participate in a repeated public good game with stochastic outcomes. They can choose each period between staying in the public project or working on their own. There is excessive exit as subjects overestimate the likelihood their partner will leave. High barriers to exit thus improve welfare. We observe that exit is driven by failure within the common project but also by pay-off comparisons across options and beliefs about being exploited. Those considerations increasingly matter as we lower exit costs across treatments.
Subjects: 
breakup
collaboration
cooperation
exit
imperfect public monitoring
moral hazard
partnerships
public good
punishment
repeated game
social risk
teams
JEL: 
C23
C92
H41
Document Type: 
Working Paper

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