The Wharton School
University of Pennsylvania
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NBER Working Papers and Publications
|August 2007||Deterministic and Stochastic Prisoner's Dilemma Games: Experiments in Interdependent Security|
with Howard Kunreuther, Eric T. Bradlow, Dylan Small: t0341
This paper examines experiments on interdependent security prisoner's dilemma games with repeated play. By utilizing a Bayesian hierarchical model, we examine how subjects make investment decisions as a function of their previous experience and their treatment condition. Our main findings are that individuals have differing underlying propensities to invest that vary across time, are affected by both the stochastic nature of the game and even more so by an individual's ability to learn about his or her counterpart's choices. Implications for individual decisions and the likely play of a person's counterpart are discussed in detail.