Sustaining Cooperation in trust Games

Abstract

It is well-known in evolutionary game theory that population clustering in Prisoner Dilemma games allows some cooperative strategies to invade populations of stable defecting strategies. We adapt this idea of population clustering to a two-person trust game. Players are typed based on their recent track record as whether or not they are trusting (Players 1) and whether or not they are trustworthy (Players 2). They are then paired according to those types: trustors with trustworthy types, and similarly non-trustors with untrustworthy types. The empirical question we address is whether this adaptation of clustering to bargaining environments sustains cooperative play analogous to the situation in finitely repeated PD games.exchange, trust, reciprocity, cooperation, clustering, bargaining, experimental economics