Teams Behave Differently from Individuals in a Dilemma Situation

What is it about?

When the matching is fixed for all periods in dilemma interactions, teams are able to sustain cooperation at high levels while individuals steadily decrease contributions from period to period. When pairs are randomly matched with other pairs in every period, they quickly decrease contributions over the periods, as is the case for individuals with the stranger matching protocol. # This paper has been accepted by Oxford Economic Papers in 2018.

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Why is it important?

My results suggest that pairs may be forward-looking and attempt to build good reputations under partner matching. This implies that "(1) teams are more competent than individuals in resolving coordination failure or dilemmas as has been shown in another context (Feri et al., 2010; Gillet et al., 2009; Müller and Tan, 2013) and (2) teams are less myopic loss averse than individuals (Sutter, 2007, 2009; Bougheas et al., 2013)."