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Strategic commitment and cooperation in experimental games of strategic complements and substitutes

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Working paper
Matthew Embrey , Friederike Mengel and Ronald Peeters
Issue number: 
Maastricht University
We study the impact of strategic commitment on cooperation in inde nitely repeated games of strategic substitutes (Cournot) and complements (Bertrand) using laboratory experiments. Overall, strategic commitment has no e ect on cooperation with strate- gic substitutes and a negative one with strategic complements. In the absence of strong strategic commitment, we nd more cooperation in the complements game than in the substitutes game. However, when subjects are more committed to initial plans, a higher level of cooperation is achieved with strategic substitutes. These results cannot be ex- plained by standard risk-dominance or renegotiation considerations, but are consistent with a notion of fear of miscoordination based on minmax regret.
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