CONJECTURE, UNCERTAINTY, AND COOPERATION IN PRISONERS-DILEMMA GAMES -SOME EXPERIMENTAL-EVIDENCE

This paper presents experimental tests of two models of cooperation in finitely-repeated prisoner's dilemma games (Kreps, Milgrom, Roberts, and Wilson, 1982). The models suggest that either a perception that th e other party may use the tit-for-tat strategy or mutual uncertainty c oncerning dominant noncooperative strategies can lead to rational coop eration. The experiment independently manipulated both types of uncert ainty and allowed for inferences concerning the players' prior, 'homem ade' preferences for cooperation. Only in relatively restricted situat ions did either type of uncertainty promote cooperation. Instead, play ers cooperated much more than was predicted; they also cooperated more when they were certain of their opponents' payoffs.