The Effect of Miscommunication on Cooperation in a Repeated Prisoner's Dilemma

Elizabeth Cameron, Samuel R Raisanen

Research output: Working paper

Abstract

In this study, we examine the effect potential miscommunication has on the ability to achieve and maintain cooperation in a repeated prisoner’s dilemma game. Economic theory is ambiguous as to direction of this effect. Potential miscommunication could lead to more forgiving participants strengthening the ability to cooperate. Alternatively, potential miscommunications might incentivize participants to take advantage of one another by anticipating that a play of Defect be falsely interpreted by their partner as a miscommunication, ultimately reducing the ability to sustain cooperation. To identify the direction of the miscommunication effect, participants are randomly paired and play a repeated prisoner’s dilemma game. Subjects are made aware of the potential of miscommunication. Miscommunication randomly changes a play of Cooperate to Defect with varying, but commonly known, probability. We find that while cooperation deteriorates faster when miscommunication is more likely, the rate of miscommunication has a non-monotonic effect on cooperation rates. When the rate of miscommunication is low, increasing it results in players being less forgiving of defection. When the rate of miscommunication is high, however, players become very forgiving of defection and punish at much lower rates.
Original languageEnglish
StateIn preparation - 1800

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