CeDEx workshop - Andrew Colman (University of Leicester)

Why Do Players Cooperate in Centipede Games?

The Centipede game provides a model of cooperation that is dynamic, in contradistinction to the static Prisoner's Dilemma game, and it presents players with greater scope for expressing cooperative versus competitive, selfish versus altruistic, and individualistic versus collective motivations than other games. The rational (subgame-perfect Nash equilibrium) solution is even more strongly counter-intuitive than that of the Prisoner's Dilemma game, and experimental findings show that players hardly ever choose it, compared to some 50% in the Prisoner's Dilemma game. The big question is why players cooperate at all in Centipede games. It is not difficult to think of possible explanations -- competitiveness, reciprocity and reputation, team reasoning and collective payoff maximization, activity bias -- but which (if any) of these actually drives cooperation is an empirical question. We have collected some experimental data that is still being analysed, and could therefore hardly be more recent, in an attempt to test these theories against one another. In this seminar I'll try to summarize what has emerged from our experiments. Are there important explanations that we have overlooked?