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Infinitely Repeated Games with Changing Discount Rates: An Experimental Study.
Last registered on May 19, 2020

Pre-Trial

Trial Information
General Information
Title
Infinitely Repeated Games with Changing Discount Rates: An Experimental Study.
RCT ID
AEARCTR-0005481
Initial registration date
February 19, 2020
Last updated
May 19, 2020 7:48 AM EDT
Location(s)

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Request Information
Primary Investigator
Affiliation
Florida State University
Other Primary Investigator(s)
PI Affiliation
Florida State University
Additional Trial Information
Status
In development
Start date
2020-02-20
End date
2020-12-31
Secondary IDs
Abstract
Most formal studies of infinitely repeated games assume a fixed discount rate, but it is clear that discount rates vary over time. This changes the dynamic incentives faced by agents and should therefore affect cooperation rates. We are particularly interested in two questions: with changing discount rates, will subjects account for the change in dynamic incentives? Will behavior change beyond what can be explained by changing dynamic incentives? On the latter question, existing research on coordination games leads us to conjecture that cooperation rates will converge to high levels regardless of the current discount rate.
External Link(s)
Registration Citation
Citation
Cooper, David and Matt Gentry. 2020. "Infinitely Repeated Games with Changing Discount Rates: An Experimental Study.." AEA RCT Registry. May 19. https://doi.org/10.1257/rct.5481-1.2000000000000002.
Experimental Details
Interventions
Intervention(s)
Most formal studies of infinitely repeated games assume a fixed discount rate, but it is clear that discount rates vary over time. This changes the dynamic incentives faced by agents and should therefore affect cooperation rates. We are particularly interested in two questions: with changing discount rates, will subjects account for the change in dynamic incentives? Will behavior change beyond what can be explained by changing dynamic incentives? On the latter question, existing research on coordination games leads us to conjecture that cooperation rates will converge to high levels regardless of the current discount rate.
Intervention Start Date
2020-02-20
Intervention End Date
2020-12-31
Primary Outcomes
Primary Outcomes (end points)
1) We are interested in what cooperation rates are reached by treatment.
2) We plan on fitting a structural model related to SFEM, and are interested in the distribution of strategies identified in the dataset as a function of the treatments.
Primary Outcomes (explanation)
Cooperation rates are measured directly from the choices of experimental subjects. We will use both individual cooperation rates and mutual cooperation rates. The former are more useful for considering individual strategies while the latter are better suited for studying transitions within a supergame. The two measures are highly correlated, so it is largely a matter of convenience which is used.

We also plan to fit a structural model to the data to estimate the distribution of strategies. We will fit SFEM using software developed by Dal Bo and Frechette (forthcoming), and also plan to modify SFEM to allow for sophisticated Bayesian learners.
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We plan to conduct laboratory experiments systematically studying the effects of varying discount rates in supergames.
Experimental Design Details
Not available
Randomization Method
We use the ORSEE recruiting system. This randomly picks a subset of the FSU subject pool and invites them to a session. Given that the invitation contains no detailed information about the treatment or experimental design, this generates random assignment to treatments.
Randomization Unit
experimental session (matching group)
Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
We plan on running a total of 30 sessions, with each session split into 2 matching groups.
Sample size: planned number of observations
We plan on a total of 600 experimental subjects.
Sample size (or number of clusters) by treatment arms
All treatments are planned to contain 5 sessions (10 matching groups) except for Switching, where these numbers will be doubled.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
This isn't particularly relevant. For differences in cooperation rates, we will use Wilcoxon rank-sum tests with the matching group as the unit of observation. The structural model uses standard maximum likelihood techniques.
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Florida State University Institutional Review Board
IRB Approval Date
2019-10-08
IRB Approval Number
STUDY00000514