Multiple Prisoner's Dilemma Games with(out) an Outside Option: an Experimental Study

Theory and Decision 54 (3):207-229 (2003)
Abstract
Experiments in which subjects play simultaneously several finite two-person prisoner's dilemma supergames with and without an outside option reveal that: (i) an attractive outside option enhances cooperation in the prisoner's dilemma game, (ii) if the payoff for mutual defection is negative, subjects' tendency to avoid losses leads them to cooperate; while this tendency makes them stick to mutual defection if its payoff is positive, (iii) subjects use probabilistic start and endeffect behavior
Keywords Prisoner's dilemma  Cooperation  Exit  Experiments  Loss aversion
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