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(*)

Table 1: Comparison of experimental designs

Matching protocol (within the economy)	Anonymity (identity of opponent is unknown)	Designs	Global	Strategy type Reactive	Targeted
Fixed matching	NO	Partner-not in this study	(i)	(i)	(i)
Random matching	No	Public monitoring (non-anonymous)	Yes	Yes	Yes
	Yes	Anonymous public monitoring	Yes	Yes
	Yes	Private monitoring		Yes
	Yes	Private monitoring with punishment	High	Yes Medium	(ii) Low
			power Not selective	power Moderately selective	power Highly selective

Table 2: The stage game

(A) Notation in the theoretical analysis

Player 1/ player 2	Y	Z
Y	У^, У	Th
Z ~	h, l '	z, z

(B) Parameterization of the experiment

Player 1/ player 2	Y	Z
Y	25, 25	573ô
Z	3075	10, 10

The stage game. The stage game is a standard prisoners’ dilemma with payoffs
determined according to Table 2 (payoffs to column and row players, respectively).⁵ We
call action Y cooperate and action Z defect. So, we say that there is cooperation in the

^(*) (i) In partner, the distinction among targeted, reactive, and global strategies is irrelevant because of the
fixed matching. (ii) One could interpret the possibility of personal punishment as a form of targeted
strategy, although the personal punishment reduces the continuation payoffs for the punisher more than
with the reactive strategy. Personal punishment expands the set of strategies. In particular it allows for a
targeted strategy because an agent can punish his opponent after observing the choice of his opponent.

⁵ We selected this parameterization as it scores high on the indexes proposed by Rapoport and Chammah
(1965), Roth and Murnighan (1978), and Murnighan and Roth (1983) that correlate with the level of
cooperation in the indefinitely repeated prisoners’ dilemma in a partner protocol. Also, in Table 2 we have
0≤ l < z < y < h and 2z < l+h <2y .

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