Cooperation in repeated interactions: A systematic review of Centipede game experiments, 1992–2016

ABSTRACT Cooperation is a fundamental form of social interaction, and turn-taking reciprocity one of its most familiar manifestations. The Centipede game provides a formal model of such alternating reciprocal cooperation, but a backward induction (BI) argument appears to prove logically that instrumentally rational players would never cooperate in this way. A systematic review of experimental research reveals that human decision makers cooperate frequently in this game, except under certain extreme conditions. Several game, situational, and individual difference variables have been investigated for their influence on cooperation. The most influential are aspects of the payoff function (especially the social gain from cooperation and the risk associated with a cooperative move), the number of players, repetitions of the game, group vs. individual decisions, and players’ social value orientations (SVOs). Our review of experimental evidence suggests that other-regarding preferences, including prosocial behavioural dispositions and collective rationality, provide the most powerful explanation for cooperation.