Cooperation and endogenous repetition in an infinitely repeated social dilemma

Abstract

Exogenously imposed infinite repetition is known to mitigate people’s uncooperative behaviors in dilemma situations with partner matching through personal enforcement. One as yet unanswered question is whether people collectively choose to interact with each other under the partner matching condition when there exists an alternative possibility under random matching. In an indefinitely repeated public goods game framework, I let subjects democratically choose whether to (1) play with pre-assigned specific others for all rounds or to (2) play with randomly matched counterparts in every round. The experimental results revealed that most groups collectively opt for the partner matching protocol. The data also indicated that groups achieve a higher level of cooperation when they democratically select the partner matching protocol by voting, relative to when the same option is exogenously imposed. These findings imply that people’s equilibrium selection may be affected by how the basic rules of games are introduced (endogenously or exogenously). The paper provides further evidence to suggest that the positive effect of democratic decision-making is stronger when the majority voting rule, rather than the unanimity rule, is applied.