| ID | 186326 |
| Title Proper | Inefficient Cooperation Under Stochastic and Strategic Uncertainty |
| Language | ENG |
| Author | Bruttel, Lisa ; Güth, Werner ; Orland, Andreas |
| Summary / Abstract (Note) | Stochastic uncertainty can cause coordination problems that may hinder mutually beneficial cooperation. We propose a mechanism of ex-post voluntary transfers designed to circumvent these coordination problems and ask whether it can increase efficiency. To test this transfer mechanism, we implement a controlled laboratory experiment based on a repeated Ultimatum Game with a stochastic endowment. Contrary to our hypothesis, we find that allowing voluntary transfers does not lead to an efficiency increase. We suggest and analyze two major reasons for this failure: first, stochastic uncertainty forces proposers intending to cooperate to accept high strategic uncertainty, which many proposers avoid; second, many responders behave only incompletely conditionally cooperatively, which hinders cooperation in future periods. |
| `In' analytical Note | Journal of Conflict Resolution Vol. 66, No.4-5; May 2022: p.755-782 |
| Journal Source | Journal of Conflict Resolution Vol: 66 No 4-5 |
| Key Words | Cooperation ; Experiment ; Ultimatum Game ; Strategic Uncertainty ; Stochastic Uncertainty |