An experiment on Prisoner’s Dilemma with confirmed proposals

We suggest 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 cooperation in the first bargaining period. We interpret pre-agreement strategies as tacit messages on players’ willingness to cooperate and as signals pursuing individualistic objectives like publicizing one’s bargaining abilities or eliciting those of the opponent.

► We suggest a bargaining mechanism inducing efficient outcomes in social dilemmas.
► Bargaining can take place with only one leader or with two alternating leaders.
► The experimental test produces unprecedented high levels of cooperation in the lab.
► The presence of only one leader increases the likelihood of immediate cooperation.
► Subjects’ strategies in Prisoner’s Dilemma are seen as tacit communication devices.