Talkin' Bout Cooperation

Özkes, Ali and Hanaki, Nobuyuki (2020) Talkin' Bout Cooperation. Department of Strategy and Innovation Working Paper Series, 08/2020. WU Vienna University of Economics and Business, Vienna.

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Abstract

We experimentally study the interaction of the effects of the strategic environment and com- munication on the observed levels of cooperation in two-person finitely repeated games with a Pareto-inefficient Nash equilibrium. We replicate previous findings that point to higher levels of tacit cooperation under strategic complementarity compared to strategic substitution. In our data, however, this is not due to differences in levels of reciprocity as suggested previously. Instead, we find that slow learning and noisy choices might drive this effect. When subjects are allowed to communicate in free-form online chat before making choices, cooperation levels increase significantly to the extent that the difference in the two strategic environments dis- appears. A machine-assisted natural language processing approach shows how the content of communication differs in the two strategic environments.

Item Type: Paper
Keywords: Communication, Cooperation, Reinforcement learning, Strategic environment, Structural topic modeling
Divisions: Departments > Strategy and Innovation > Markets and Strategy
Depositing User: Gerlinde Rattasits-Kaas
Date Deposited: 04 Mar 2020 15:15
Last Modified: 04 Mar 2020 15:15
URI: https://epub.wu.ac.at/id/eprint/7505

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