Social Learning of Efficiency Enhancing TradeWith(out) Market Entry Costs - An ExperimentalStudy

We investigate experimentally whether entry costs have an impact on the evolutionof cooperation in a social dilemma game. In particular, subjects repeatedly playthe so-called takeover game with anonymous partners randomly drawn from a fixedpopulation of participants. The game represents a social dilemma because selfishlyrational players can fail to make efficient trades due to information asymmetries.In order to create a potential for social learning, we provide subjects with feedbackabout average results in the population. Our interest lies in observing the extentto which cooperative behaviors facilitating trade are adopted. Our main conjectureis that market entry costs inspire more trade. This is only partly confirmed by thedata.