Time Horizon and Cooperation in Continuous Time

We study interactions with different durations and termination rules in a (quasi) continuous-time prisoner’s dilemma experiment. We find that cooperation is easier to achieve and sustain with deterministic horizons than with stochastic ones; end-game effects emerge, but subjects postpone them with experience; longer duration helps cooperation. Static theories for continuous-time games cannot simultaneously account for these findings and miss the evolution of behavior across supergames. We propose a simple model – based on the replicator dynamics – that proves consistent with this evidence. The analysis of strategies and an additional treatment lend further support to the proposed explanation.