The Evolution of Cooperation: The Role of Costly Strategy Adjustments

Abstract

We study the evolution of cooperation in the indefinitely repeated prisoner’s dilemma when it is costly for players to adjust their strategy. Our experimental interface allows subjects to design a comprehensive strategy that then selects actions for them in every period. We conduct lab experiments in which subjects can adjust their strategies during a repeated game but may incur a cost for doing so. We find three main results. First, subjects learn to cooperate more when adjustments are costless than when they are costly. Second, subjects make more adjustments to their strategies when adjustments are costless, but they still make adjustments even when they are costly. Finally, we find that cooperative strategies emerge over time when adjustments are costless but not when adjustments are costly. These results highlight that within-game experimentation is critical to the rise of cooperative behavior. We provide simulations based on an evolutionary algorithm to support these results. (JEL C71, C72, C73, C91)

Using Team Discussions to Understand Behavior in Indefinitely Repeated Prisoner’s Dilemma Games

“…Related to the latter point, results from Romero and Rosokha (2019) are consistent with individuals improvising within supergames. Their experiment used individuals as agents, long IRPD games (δ = .98), and direct elicitation of strategies.…”

“…The analysis of team dialogues has important implications for how cooperation emerges and suggests new ways of modeling this process. There have been relatively few learning models used to study IRPD games (see Dal Bó andFréchette, 2011 andRosokha, 2019 for exceptions), but the strong dynamics in the data point to the importance of such models. Teams 38 Play by individuals and teams clearly is not identical.…”

It’S Payback Time: New Insights on Cooperation in the Repeated Prisoners’ Dilemma

“…In other words, in the FRD setting, the introduction of Payback downsizes the role of TFT and restores the ability of equilibrium conditions and risk dominance to predict cooperation also with imperfect monitoring. A number of other experiments have reported an important role for TFT in categorizing behavior (for example, Bigoni et al, 2013;Fréchette, 2011, 2019;Dvorak and Fehrler, 2018;Embrey et al, 2016;Romero and Rosokha, 2019) and Payback can offer a new perspective on their results. In general, Payback has been overlooked in the empirical literature.…”

Constructing strategies in the indefinitely repeated prisoner’s dilemma game

“…Although the strategies are now directly observable, subjects' behavior may be influenced by the strategies presented in the set. In the third approach, which we take, players construct strategies from scratch (Bruttel and Kamecke, 2012;Embrey, Mengel, and Peeters, 2016;Dal Bó and Fréchette, 2017;Romero and Rosokha, 2016). An advantage of our interface is that there are minimal restrictions on the types and lengths of pure strategies.…”