Subject ▸ Centipede Game

Intergenerational Cooperation: an Experimental Study of Ageism in Trust and Exploitation

Abstract Financial exploitation of trusting older adults by younger adults is the most prevalent and frequent form of elder abuse and a source of mounting concern given the increasing demands for intergenerational cooperation across greying societies. We conducted an experiment with older (>55 years old) and younger (<26 years old) adults who repeat- edly played 4 versions of a centipede game (CG) within and between age-groups. By altering payouts across 4 version of the CG we can dis- tinguish “cooperative” behavior motivated by equal payoffs from instru- mentally “cooperative” behavior motivated by varying levels of incen- tives made available for exploitation through trust-based turn taking.

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Intergenerational Cooperation: An Experimental Study on Beliefs

We report on an experiment in which subjects older than 55 years old and subjects younger than 26 years old play repeatedly 4 versions of the centipede game. For each game we define four treatments that allow us to study cooperation and belief formation of these two age groups. We find that beliefs about the others’ age group shape the outcome: while seniors are cooperative and generous with juniors when they incur lower opportunity costs, for juniors it is when playing with seniors that they learn the way to the theoretical solution by smoothly decreasing their cooperation levels.

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