Social, Behavioral and Experimental Economics Seminar: David J. Cooper, University of Iowa & University of East Anglia
Abstract
We study spontaneous changes by freely interacting two-person teams playing infinitely repeated prisoners’ dilemma (IRPD) games with perfect and imperfect monitoring. Spontaneous change refers to cases where teams either switch the initial action used for the first stage game of a supergame or deviate from mutual cooperation/defection within a supergame. The existing experimental literature on IRPD games largely treats spontaneous changes as random trembles. It has not examined why spontaneous changes occur or what their occurrence implies for the distribution of strategies and the development of cooperation with experience. We document that spontaneous changes are common, cannot be entirely attributed to trembles, and have persistent effects. We develop LLM-based techniques for analyzing the content of messages between teams and apply these techniques to understand the rationale underlying spontaneous changes. Changes to cooperation are most frequently motivated by leading by example while switches to defection reflect risk avoidance or, under imperfect monitoring, short-term profit taking. Finally, we develop a structural model that incorporates switching strategies both within and between repeated games. We show that allowing for dynamics substantially improves the model’s ability to fit the data and substantially changes the estimated distribution of strategies.
About the SBEE Seminar Series
The Social, Behavioral and Experimental Economics seminar series brings together a community of economics scholars from three units at the University of Michigan — the School of Information, the Department of Economics and the Ross Business School — whose research aims to broaden the understanding of the social, economic and political consequences of real-life decisions and behaviors.
Top researchers from around the globe come to Michigan to present their work at the SBEE seminar series, exploring the intersection of economics, psychology, computer science and information science.
The seminar series is organized by U-M faculty members Yan Chen (UMSI), Alain Cohn (UMSI), Erin Krupka (UMSI), Stephen Leider (Ross), Christine Exley (Econ), A. Yesim Orhun (Ross), Tanya Rosenblat (UMSI), Karthik Srinivasan (UMSI) and Basit Zafar (Econ). Todd Stuart serves as seminar coordinator.
Featured Speaker
David J. Cooper
University of Iowa and University of East Anglia
Dr. Cooper is the Tippie and Rollins Chair in Economics at the University of Iowa and holds a joint appointment at the University of East Anglia as Professor of Economics. Dr. Cooper graduated from Harvard University (A.B., 1988) and Princeton University (PhD, 1993). His research focuses on experimental economics with applications to game theory, the economics of organizations, and entrepreneurship. His work studies decision making by teams, leadership, and coordination within organizations and has appeared in, among other outlets, the American Economic Review, the Journal of the European Economic Association, and Management Science. Dr. Cooper has previously served as editor-in-chief for Experimental Economics and currently serves as an advisory editor for Experimental Economics and Games and Economic Behavior, an associate editor for Management Science, and as co-editor for Economic Theory.
Contact: [email protected]