Gradual cooperation in the existence of outside options
AbstractThe paper shows that efficient cooperation processes exhibit gradualism when each player does not know the likelihood that the other player exercises a stochastically available outside option. Two players, asymmetrically informed on this likelihood, play an infinitely repeated prisoner's dilemma game. Each player is either the high type with the high probability to obtain the outside option or the low type. As time proceeds with neither player exercising the outside option, each player puts more probability on the belief that his partner is the low type, enabling the players to raise cooperation levels in the efficient pooling equilibrium.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 68 (2008)
Issue (Month): 2 (November)
Contact details of provider:
Web page: http://www.elsevier.com/locate/jebo
Gradualism Cooperation Asymmetric information Belief updating;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ghosh, Parikshit & Ray, Debraj, 1996.
"Cooperation in Community Interaction without Information Flows,"
Review of Economic Studies,
Wiley Blackwell, vol. 63(3), pages 491-519, July.
- Parikshit Ghosh & Debraj Ray, 1995. "Cooperation in Community Interaction Without Information Flows," Boston University - Institute for Economic Development 64, Boston University, Institute for Economic Development.
- Furusawa, Taiji & Lai, Edwin L. -C., 1999. "Adjustment costs and gradual trade liberalization," Journal of International Economics, Elsevier, vol. 49(2), pages 333-361, December.
- Matsushina, Hitoshi, 1990. "Long-term partnership in a repeated prisoner's dilemma with random matching," Economics Letters, Elsevier, vol. 34(3), pages 245-248, November.
- Ben Lockwood & Jonathan P. Thomas, 1999.
"Gradualism and Irreversibility,"
CSGR Working papers series
28/99, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
- Ben Lockwood & Jonathan P. Thomas, 2002. "Gradualism and Irreversibility," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 339-356.
- Lockwood, Ben & Thomas, Jonathan P, 2002. "Gradualism and Irreversibility," Review of Economic Studies, Wiley Blackwell, vol. 69(2), pages 339-56, April.
- Lockwood, B. & Thomas, J.P., 1999. "Gradualism and Irreversibility," The Warwick Economics Research Paper Series (TWERPS) 525, University of Warwick, Department of Economics.
- Ben Lockwood & Jonathan P. Thomas, 1999. "Gradualism and Irreversibility," Discussion Paper Series, Department of Economics 199909, Department of Economics, University of St. Andrews.
- Lockwood, B. & Thomas, J.P., 1999. "Gradualism and Irreversibility," The Warwick Economics Research Paper Series (TWERPS) 550, University of Warwick, Department of Economics.
- James Andreoni & Larry Samuelson, 2003.
"Building Rational Cooperation,"
Levine's Working Paper Archive
506439000000000477, David K. Levine.
- Marx, Leslie M & Matthews, Steven A, 2000.
"Dynamic Voluntary Contribution to a Public Project,"
Review of Economic Studies,
Wiley Blackwell, vol. 67(2), pages 327-58, April.
- Leslie M. Marx & Steven A. Matthews, . "Dynamic Voluntary Contribution to a Public Project," Penn CARESS Working Papers 6f8dbf67d492ff8a10975496b, Penn Economics Department.
- Leslie M. Marx & Steven A. Matthews, . ""Dynamic Voluntary Contribution to a Public Project''," CARESS Working Papres 99-01, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Leslie M. Marx & Steven A. Matthews, 1997. "Dynamic Voluntary Contribution to a Public Project," Discussion Papers 1188, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Kranton, Rachel E, 1996. "The Formation of Cooperative Relationships," Journal of Law, Economics and Organization, Oxford University Press, vol. 12(1), pages 214-33, April.
- Watson, Joel, 2002.
"Starting Small and Commitment,"
Games and Economic Behavior,
Elsevier, vol. 38(1), pages 176-199, January.
- Joel Watson, 1999. "Starting Small and Commitment," Cowles Foundation Discussion Papers 1217, Cowles Foundation for Research in Economics, Yale University.
- Watson, Joel, 1999. "Starting Small and Commitment," University of California at San Diego, Economics Working Paper Series qt37p340fc, Department of Economics, UC San Diego.
- Fershtman, Chaim & Gandal, Neil, 1994.
International Journal of Industrial Organization,
Elsevier, vol. 12(2), pages 141-154, June.
- Olivier Compte & Philippe Jehiel, 2004.
"Gradualism in Bargaining and Contribution Games,"
Review of Economic Studies,
Wiley Blackwell, vol. 71(4), pages 975-1000, October.
- Pranab Bardhan, 2004. "Scarcity, Conflicts, and Cooperation: Essays in the Political and Institutional Economics of Development," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262524295, January.
- Rafael Rob & Huanxing Yang, 2010.
"Long-term relationships as safeguards,"
Springer, vol. 43(2), pages 143-166, May.
- Sobel, Joel, 1985. "A Theory of Credibility," Review of Economic Studies, Wiley Blackwell, vol. 52(4), pages 557-73, October.
- Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-54, May.
- Admati, Anat R & Perry, Motty, 1991. "Joint Projects without Commitment," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 259-76, April.
- Petersen, Mitchell A & Rajan, Raghuram G, 1994. " The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, vol. 49(1), pages 3-37, March.
- Watson, Joel, 1999. "Starting Small and Renegotiation," Journal of Economic Theory, Elsevier, vol. 85(1), pages 52-90, March.
- Takashi Kamihigashi & Taiji Furusawa, 2007. "Global Dynamics in Infinitely Repeated Games with Additively Separable Continuous Payoffs," Discussion Paper Series 210, Research Institute for Economics & Business Administration, Kobe University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.