Modelling structural changes in the volatility process

The tension between cooperation and competition that characterizes many business " relationships is experimentally studied in a “pie”-creation game; value is created and" increased through cooperation in a repeated prisoner’s dilemma game. At the end, the player with the greater stake in the joint pie decides on the division of the pie. Three treatments of the pie-creation game are considered: in the first treatment, rivals create " the pie; in the second, non-rivals create the pie; finally, in the third, the pie is created by" subjects who do not know about the future pie-division. The data show that the competition for the right to split the pie biases behaviors towards defection when subjects play with their rival.