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Full-Text Articles in Economics
Cooperation In Temporary Partnerships, Gabriele Camera, Alessandro Gioffré
Cooperation In Temporary Partnerships, Gabriele Camera, Alessandro Gioffré
ESI Working Papers
The literature on cooperation in infinitely repeated Prisoner’s Dilemmas covers the extreme opposites of the matching spectrum: partners, a player’s opponent never changes, and strangers, a player’s opponent randomly changes in every period. Here, we extend the analysis to settings where the opponent changes, but not in every period. In these temporary partnerships, players can deter some deviations by directly sanctioning their partner. Hence, relaxing the extreme assumption of one-period matchings can support some cooperation also off equilibrium because a class of strategies emerges that are less extreme than the typical “grim” strategy. We establish conditions supporting full …
Agency, Benevolence And Justice, Prithvijit Mukherjee, J. Dustin Tracy
Agency, Benevolence And Justice, Prithvijit Mukherjee, J. Dustin Tracy
ESI Working Papers
We test for social norms regarding how Agents should select between risky prospects for Principals, including norms consistent with observations by Adam Smith. We elicit norms from subjects serving as ``impartial spectator[s]" about the choice of risky prospects selected by the Agents. We find strong evidence for the existence of norms, consistent with Smith's observations. Furthermore, we find that Agents are more likely to select more normative options. In contrast, we find that Principals' allocation for bonuses depends on the realization of the risky prospect rather than whether the Agents' choice was consistent with the norm.
Group-Identity And Long-Run Cooperation: An Experiment, Gabriele Camera, Lukas Hohl
Group-Identity And Long-Run Cooperation: An Experiment, Gabriele Camera, Lukas Hohl
ESI Working Papers
We stress-test the limits of the power of group identity in the context of cooperation by constructing laboratory economies where participants confront an indefinitely repeated social dilemma as strangers. Group identity is artificially induced by random assignment to color-coded groups, and reinforced by an initial cooperation task played in-group and in fixed pairs. Subsequently subjects interact in-group and out-group in large economies, as strangers. Indefinite repetition guarantees full cooperation is an equilibrium. Decision-makers can discriminate based on group affiliation, but cannot observe past behaviors. We find no evidence of group biases. This suggests that group effects are less likely to …
Cooperation In Indefinitely Repeated Helping Games: Existence And Characterization, Gabriele Camera, Alessandro Gioffré
Cooperation In Indefinitely Repeated Helping Games: Existence And Characterization, Gabriele Camera, Alessandro Gioffré
ESI Working Papers
Experiments that investigate the spontaneous emergence of money in laboratory societies rely on indefinitely repeated helping games with random matching (Camera et al., 2013; Camera and Casari, 2014). An important open issue is the lack of a general proof of existence of an equilibrium capable of supporting the efficient allocation under private monitoring, without money. Here, we fill this gap by offering a general proof, as well as by characterizing the efficient non-monetary equilibrium. This technique can be extended to study games with simultaneous actions.
Cooperation Among Strangers With And Without A Monetary System, Maria Bigoni, Gabriele Camera, Marco Casari
Cooperation Among Strangers With And Without A Monetary System, Maria Bigoni, Gabriele Camera, Marco Casari
ESI Working Papers
Human societies prosper when their members move beyond local exchange and cooperate with outsiders in the creation of wealth. Collaboration of this type presents formidable challenges because interaction is impersonal, reciprocity is unfeasible and trust cannot be easily established. Here we study this cooperation problem by modeling strategic interaction among strangers through an Intertemporal Exchange Game. The setup can be easily implemented in the laboratory to study a variety of cooperation-enhancing institutions. In particular, we study the role of a fiat monetary system by introducing intrinsically worthless tokens that can be offered in exchange for cooperation. The experiments show that …
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
ESI Working Papers
Impersonal exchange is the hallmark of an advanced society and money is one key institution that supports it. Economic theory regards money as a crude arrangement for monitoring counterparts’ past conduct. If so, then a public record of past actions—or memory—should supersede the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equivalence between money and memory does not translate into an empirical equivalence: money removed the incentives to free ride, while memory did not. Monetary systems performed a richer set of functions than just revealing past behaviors.
Do Economic Inequalities Affect Long-Run Cooperation?, Gabriele Camera, Cary Deck, David Porter
Do Economic Inequalities Affect Long-Run Cooperation?, Gabriele Camera, Cary Deck, David Porter
ESI Working Papers
Does inequality affect a group’s cohesion and ability to prosper? Participants in laboratory economies played an indefinite sequence of helping games in random, anonymous pairs. A coin flip determined donor and recipient roles in each pair. This random shock ensured equality of opportunity but not of results, because earnings depended on realized shocks. We manipulated the ability to condition choices on this uncontrollable inequality source. In all treatments, uncertain ending supports multiple Pareto-ranked equilibria, including full cooperation. Theoretically, inequalities do not alter the incentives’ structure. Empirically, inequality disclosures altered conduct, weakened norms of mutual support and reduced efficiency.
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
ESI Working Papers
Impersonal exchange is the hallmark of an advanced society. One key institution for impersonal exchange is money, which economic theory considers just a primitive arrangement for monitoring past conduct in society. If so, then a public record of past actions—or memory—supersedes the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equality between money and memory does not translate into an empirical equivalence. Monetary systems perform a richer set of functions than just revealing past behaviors, which proves to be crucial in promoting large-scale cooperation.