Template-Type: ReDIF-Paper 1.0
Title: Individual Strategy Choice in the Repeated Prisoner’s Dilemma

Author-Name: Teresa Backhaus
Author-Email:tbackhaus@uni-bonn.de
Author-Name: Yves Breitmoser
Author-Email:yves.breitmoser@uni-bielefeld.de

Classification-JEL: C72, C73, C92, D12
Keywords: Repeated game, Behavior, Tit-for-tat, Mixed strategy, Memory, Belief-free
equilibrium, Laboratory experiment

Abstract: Reanalyzing 12 experiments on the repeated prisoner’s dilemma (PD), we find strong
evidence for players’ use of behavior strategies. Starting with unrestricted memory-1
strategies, the most parsimonious non-rejected representation of behavior distinguishes
three subject types: defectors, cautious cooperators and strong cooperators. The defectors defect with a high probability in every round. Both cooperating types play
semi-grim behavior strategies with different cooperation rates in round 1. This simple three-type mixture fits significantly better than 1046 combinations of (generalized)
pure strategies from the literature, which we fitted at the treatment level. Semi-grim
behavior strategies fit better than all 1046 mixtures of (generalized) pure strategies even
when we use a constant and pre-defined specification, without using free parameters or
any kind of post-hoc econometric magic. Furthermore, the resulting type shares correlate with the treatment parameters in a predictable manner, and the strategies themselves
are largely predictable thanks to their approximate invariance, but the strategies cannot
be rationalized as responses to expected payoffs.

Note: 
Length: 62
Creation-Date: 2022-03
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp341
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2022_341v2