Conditional cooperation in a sequential move game

Cooperation is a pervasive social phenomenon, but more often that not economic theories have little to say about causes and consequences. In this paper, we explore the hypothesis that cooperative behavior might be motivated by pure self-interest when the "social" pay-off in a game is increasing. We report the results of a series of experiments on the Centipede Game. The experiments are organised in two subsequent steps. Subject first participate in a two-period Trust Game, randomly matched with unknown partners. we apply the strategy method in order to elicit their social preferences. On the basis of their pre-game behavior, individuals are divided in three main social groups: selfish individuals, pure altruists, and reciprocators. At the second step of the experiment, subjects play a repeated 6-move Centipede Game with an increasing final pay-off. Each subject plays twice, in a low and in a high-stake Centipede Game, and he/she is informed about his/her co-player social preferences. we provide statistical evidence to identify the origin of cooperation within heterogeneous and homogeneous social groups. We construct a Poisson regression model to assess the determinants of the duration of coditional cooperation in the Centipede.