Far but finite horizons promote cooperation in the Centipede game

The sequential Centipede game models repeated reciprocal interaction, in which two players alternate in choosing between cooperation and defection. In an attempt to increase the game's applicability to real-life decision contexts, we investigated the effects of game length and termination rules on cooperation in the Centipede game. We found that increasing the game length from 8 to 20 decision nodes increased cooperation, but only if the game's end was known to participants. Games with unknown ends manifested lower cooperation levels without an endgame effect (increased defection immediately before a known end). Random game termination by the computer appeared to increase the percentage of games adhering to the Nash equilibrium outcome mandated by game theory, and generally lowered cooperation levels.