This project involves the design and execution of laboratory experiments on cooperation in finitely repeated games. Particular conditions to be examined include nonbinding communication ("cheap talk"). Other experiments are designed to investigate the relationship between cooperation levels and the payoff properties of outcomes that serve as possible punishments or rewards. Game theorists have devoted considerable attention to models of equilibrium cooperation in dynamic, multi-stage games. The conditions thought to be necessary for such cooperation to occur are affected by market and individual characteristics that alter the structure of the game. This project examines the behavioral significance of these characteristics. Such an assessment is important for future theoretical work. In addition, insights gained from laboratory data may aid in predicting when cooperative outcomes will arise in naturally occurring markets. Many policy debates turn on assumptions about the extent to which economic agents behave cooperatively. The desirability of challenging a horizontal merger, for example, depends largely on the likelihood of a post-merger conspiracy. Similarly, when product quality is unobserved prior to purchase, consumer-protection policies may be unnecessary if consumers and producers cooperate.

Agency
National Science Foundation (NSF)
Institute
Division of Social and Economic Sciences (SES)
Type
Standard Grant (Standard)
Application #
9012691
Program Officer
Daniel H. Newlon
Project Start
Project End
Budget Start
1990-07-01
Budget End
1993-06-30
Support Year
Fiscal Year
1990
Total Cost
$33,464
Indirect Cost
Name
Virginia Commonwealth University
Department
Type
DUNS #
City
Richmond
State
VA
Country
United States
Zip Code
23298