We report on an experiment conducted to study the effect of strategic substitutability
and strategic complementarity on cooperation in innitely repeated two-player games.
We find that choices in the first rounds of the repeated games are significantly more
cooperative under strategic substitutes than under strategic complements and that
players are more likely to choose joint-payoff maximizing choices in the former than in
the latter case. We argue that this effect is driven by the fact that it is less risky to
cooperate under substitutes than under complements. We also find that choices under
strategic substitutes do not remain more cooperative than under complements over the
course of the rounds within the repeated games. We show that this is because best-reply
dynamics come into the picture: players are more inclined to follow cooperative moves
of the partner under complements, offsetting the treatment effect observed in the first
rounds.