Intelligence, Errors, and Cooperation in Repeated Interactions

Eugenio Proto, Aldo Rustichini, Andis Sofianos

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

We study how strategic interaction and cooperation are affected by the heterogeneity of cognitive skills of groups of players, over consecutive plays of repeated games with randomly matched opponents using Prisoner’s Dilemma as stage game. We observe overall higher cooperation rates and average final payoffs in integrated treatment groups—where subjects of different IQ levels interact together—than in separated treatment groups. Lower IQ subjects are better off and higher IQ subjects are worse off in integrated groups than in separated groups. Higher IQ subjects adopt harsher strategies when they are pooled with lower IQ subjects than when they play separately. We demonstrate that this outcome should be expected in learning and evolutionary models where higher intelligence subjects exhibit lower frequency of errors in the implementation of strategies. Estimations of errors and strategies in our experimental data are consistent with the model’s assumptions and predictions.

Original languageEnglish (US)
Pages (from-to)2723-2767
Number of pages45
JournalReview of Economic Studies
Volume89
Issue number5
DOIs
StatePublished - Oct 1 2022

Bibliographical note

Publisher Copyright:
© The Author(s) 2021.

Keywords

  • Cooperation
  • Evolutionary games
  • Intelligence
  • Learning
  • Repeated prisoners dilemma
  • Strategy errors

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