We report results from an experiment that examines play in an indefinitely repeated, two-player Prisoner's Dilemma game. Each experimental session involves N subjects and a sequence of indefinitely repeated games. The main treatment consists of whether agents are matched in fixed pairings or matched randomly in each indefinitely repeated game. Within the random matching treatment, we elicit player's strategies and beliefs or vary the information that players have about their opponents. Contrary to a theoretical possibility suggested by Kandori [1992. Social norms and community enforcement. Rev. Econ. Stud. 59, 63-80], a cooperative norm does not emerge in the treatments where players are matched randomly. On the other hand, in the fixed pairings treatment, the evidence suggests that a cooperative norm does emerge as players gain more experience.

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This paper reports findings from an experiment that implements a search-theoretic model of money as a medium of exchange. The question examined is whether subjects learn to adopt the same commodities as media of exchange that the model predicts will be used in equilibrium. We report that subjects have a strong tendency to play "fundamental" rather than "speculative" strategies even in environments where speculative strategies yield higher payoffs. We examine some possible motivations for subjects' behavior and conclude that subjects are mainly motivated by past payoff experience as opposed to the marketability considerations that the theory emphasizes.

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