Friend or Foe?A Natural Experiment of the Prisoner's Dilemma

Abstract

This study examines data drawn from the game show Friend or Foe? which is similar to the classic prisoner's dilemma tale: partnerships are endogenously determined, and players work together to earn money, after which they play a one-shot prisoner's dilemma game over large stakes: varying from $200 to (potentially) more than $22,000. The data reveal several interesting insights; perhaps most provocatively, they suggest that even though the game is played in front of an audience of millions of viewers, some of the evidence is consistent with a model of discrimination. The observed patterns of social discrimination are unanticipated, however.

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