Fostering Cooperation Through Continuous Time Experience in Finitely Repeated Prisoners’ Dilemma

Abstract

This paper investigates how prior experience in continuous time environments fosters cooperation in finitely repeated prisoners’ dilemma games played in discrete time. We conduct a laboratory experiment in which subjects interact under both continuous and discrete time environments with controlled settings. The results reveal a pronounced one-sided spillover effect: prior experience in continuous time significantly increases cooperation in subsequent discrete time interactions, whereas prior discrete time experience does not diminish cooperation in continuous time. Further analysis shows that this positive spillover operates by enhancing initial cooperation, mitigating endgame defection, reducing the adoption of Always Defection strategy, and increasing the use of finite punishment strategies. These findings suggest that enabling real-time interactions early can foster sustained cooperation, even when interaction becomes slow, suggesting that short periods of onsite collaboration may improve outcomes in remote or asynchronous work environments.

Keywords: Behavioral spillover; Continuous time; Finitely repeated discrete time; Prisoners’ dilemma; Laboratory experiment

JEL Classification: C72; C73; C92