Endogenous reputation formation under the shadow of the future

Kenju Kamei

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)

Abstract

Recent research has shown that making people's decisions known to others may enhance cooperation in infinitely repeated prisoner's dilemma games with random matching. This paper experimentally studies whether people can cooperate with each other by endogenously showing their identities and building cooperative reputations when there is an option to hide the identities. Our experiment shows that a non-negligible fraction of subjects choose to conceal their identities and accordingly subjects fail to cooperate with each other in communities if hiding is cost-free. However, almost all subjects disclose their identities and successfully achieve cooperation if a cost is charged for the act of hiding. This finding has a broad methodological implication for the study of reputation mechanisms when infinitely repeated games are used in an experiment, as people's behavior may be determined by their ability to hide identities.

Original languageEnglish
Pages (from-to)189-204
Number of pages16
JournalJournal of Economic Behavior and Organization
Volume142
DOIs
Publication statusPublished - 2017 Oct
Externally publishedYes

Keywords

  • Cooperation
  • Experiment
  • Infinitely repeated game
  • Prisoner's dilemma game
  • Reputation

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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