SBEE Lecture Series: Yaroslav Rosokha

Mon, 09/11/2017 - 3:30pm to 5:00pm

Ehrlicher Room, 3100 North Quad

The Evolution of Cooperation: The Role of Costly Strategy Adjustments

The Social, Behavioral and Experimental Economics lecture series is sponsored by the School of Information, the Ross School of Business and the Department of Economics. Speakers from U.S. and international universities present their research at weekly seminars during the 2017-2018 academic year.

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 and learning are critical to the rise of cooperative behavior. We provide simulations based on an evolutionary algorithm to support these results.

Speaker Bio:

Yaroslav Rosokha is an assistant professor of economics in the Krannert School of Management at Purdue University. He received his Ph.D. in economics from the University of Texas at Austin. Dr. Rosokha's research interests include individual, social, and operational decision making under uncertainty. In particular, he uses experiments and agent-based computational models to investigate learning processes and outcomes in the presence of (strategic) uncertainty.