Time Horizon and Cooperation in Continuous Time

Time Horizon and Cooperation in Continuous Time∗

We study interactions with different durations and termination rules in a (quasi) continuous-time prisoner’s dilemma experiment. We find that cooperation is easier to achieve and sustain with deterministic horizons than with stochastic ones; end-game effects emerge, but subjects postpone them with experience; longer duration helps cooperation. Static theories for continuous-time games cannot si...

SUPPLEMENT TO “ TIME HORIZON AND COOPERATION IN CONTINUOUS TIME ” ( Econometrica

Trust, Cooperation and Time Horizon in Economic Decisions

My paper addresses an issue that is rarely discussed in the economics literature: how does the economic actors’ trust in each other and in the legal and political institutions affect a country’s economic performance? The first part of the paper is an empirical analysis of the interrelationship between confidence in institutions in different countries, the economic actors’ willingness to coopera...

Continuous time portfolio optimization

This paper presents dynamic portfolio model based on the Merton's optimal investment-consumption model, which combines dynamic synthetic put option using risk-free and risky assets. This paper is extended version of methodological paper published by Yuan Yao (2012). Because of the long history of the development of foreign financial market, with a variety of financial derivatives, the study on ...

Chaos and unpredictability in evolution of cooperation in continuous time.

Cooperators benefit others with paying costs. Evolution of cooperation crucially depends on the cost-benefit ratio of cooperation, denoted as c. In this work, we investigate the infinitely repeated prisoner's dilemma for various values of c with four of the representative memory-one strategies, i.e., unconditional cooperation, unconditional defection, tit-for-tat, and win-stay-lose-shift. We co...