Dynamic probability of reinforcement for cooperation: Random game termination in the centipede game

Abstract

Experimental games have previously been used to study principles of human interaction. Many such games are characterized by iterated or repeated designs that model dynamic relationships, including reciprocal cooperation. To enable the study of infinite game repetitions and to avoid endgame effects of lower cooperation toward the final game round, investigators have introduced random termination rules. This study extends previous research that has focused narrowly on repeated Prisoner's Dilemma games by conducting a controlled experiment of two-player, random termination Centipede games involving probabilistic reinforcement and characterized by the longest decision sequences reported in the empirical literature to date (24 decision nodes). Specifically, we assessed mean exit points and cooperation rates, and compared the effects of four different termination rules: no random game termination, random game termination with constant termination probability, random game termination with increasing termination probability, and random game termination with decreasing termination probability. We found that although mean exit points were lower for games with shorter expected game lengths, the subjects' cooperativeness was significantly reduced only in the most extreme condition with decreasing computer termination probability and an expected game length of two decision nodes.

Keywords: Centipede game; backward induction; cooperation; endgame effects; random game termination; reciprocity.