Is Cooperation Stimulated in a Prisoner’s Dilemma by Establishing an Efficient Outcome in a Simultaneously Played Coordination Game?: An Experimental Analysis

Abstract

The bargaining process in economic and political issues such as the Economic Partnership Agreement (EPA) can present players with a situation wherein they engage in multiple games with their counterpart. Such a situation can be modeled as playing a Prisoner’s Dilemma (PD) game and a Coordination Game (CG) simultaneously and repeatedly with the counterpart. Referring to the equilibrium prediction and prior experimental results, we experimentally compared the individual and mutual cooperation rates in the PD when the subjects repeatedly played only the PD game with the identical counterpart (treatment G D) and when they repeatedly and simultaneously played the PD and the CG with the identical counterpart in each round (treatment G DC). First, we found that the individual cooperation rate was higher in the G D treatment than in the G DC treatment. Second, the mutual cooperation rate was higher in the G DC treatment than in the G D treatment in the second half rounds. Thus, playing the CG initially reduced cooperation in the PD but increased mutual cooperation in the PD in the later rounds. The first result could be attributed to the subjects’ facing a more complicated situation in the G DC treatment than the G D treatment. In contrast, the second result could be attributed to the subjects’ tendency to offer similar choices between the games in the G DC treatment.