We apply an alternating proposals protocol with a confirmation stage as a way of solving a Prisoner’s Dilemma game. We interpret players’ proposals and (no) confirmation of outcomes of the game as a tacit communication device. The protocol leads to unprecedented high levels of cooperation in the laboratory. Assigning the power of confirmation to one of the two players alone, rather than alternating the role of a leader significantly increases the probability of signing a cooperative agreement in the first bargaining period. We interpret pre-agreement strategies as tacit messages on players’ willingness to cooperate and on their beliefs about the others’ type.
Prisoner’s Dilemma; Bargaining; Confirmed Proposals; Confirmed Agreement; Tacit Communication;
- C72: Noncooperative Games
- C91: Laboratory, Individual Behavior
- C92: Laboratory, Group Behavior
TSE Working Paper, n. 11-274, December 2011