Vecon Lab Choice of Partners Game: Introduction

Overview: This program sets up a network of two-player games with symmetric payoffs (e.g. prisoner's dilemma games). Players interact with a sequence of new potential partners (one new partner per round). After each round, it is possible to break links with one or more current partners, or to adjust the scale of interactions with existing partners, either up or down. A link is broken if either partner chooses to terminate it. The scale of interactions is determined by a payoff multiplier, which is the minimum of the scale parameters selected by each partner for that link. The setup options allow adjustments of link durations and information histories of of prospective partners.

The experiment can be used to show how sustained high cooperation can evolve when link formation is endogenous, even when the number of rounds is known and subjects cannot observe histories of others' decisions with third parties. Subjects tend to scale up the intensity of linked connections as they build trust. Class discussion can be focused on aspects of tit-for-tat behavior, punishments, and mutual trust. (Holt, Johnson, and Schmidtz, "Prisoner's Dilemma Experiments" in The Prisoner's Dilemma, M. Peterson, ed., Cambridge University Press, 2015, 243-264.

Vecon Lab - May 19, 2019