Chapter 82 Partners versus Strangers: Random Rematching in Public Goods Experiments

Simply repeating the game with the same set of subjects may change the nature of equilibrium, since incomplete information about types can lead to reputation effects of the sort described in this chapter. A common way to deal with this has been to rematch subjects randomly into groups for each iteration of the game, hence forming a repeated single-shot design and avoiding the repeated-game effects. This chapter tested this question by comparing a set of subjects who played infinitely repeated games with another set who played in a repeated single-shot. Players in the repeated game were called Partners, while those in the repeated single-shot game were called Strangers. The discussion of Partners versus Strangers thus far has been predicated on the assumption that the incentives of individuals are consistent with money-maximization in the experiment.