Slow to Anger and Fast to Forget: Leniency and Forgiveness in an Uncertain World

We study the experimental play of the repeated prisoner's dilemma when intended actions are implemented with noise. In treatments where cooperation is an equilibrium, subjects cooperate substantially more than in treatments without cooperative equilibria. Furthermore, cooperative strategies yielded higher payoffs than uncooperative strategies in the treatments with cooperative equilibria. In these treatments successful strategies were "lenient" in not retaliating for the first defection, and many were "forgiving" in trying to return to cooperation after inflicting a punishment. In all settings there was considerable strategic diversity, indicating that subjects had not fully learned the distribution of play. There was no difference across treatments in giving in a post- experiment dictator game, and dictator giving was not correlated with cooperation in the treatments with high returns on cooperation. We conclude that leniency and cooperation in settings with cooperative equilibria are primarily driven by strategic considerations.

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