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Role-reversibility, stochastic ignorance, and social cooperation

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  • Fon, Vincy
  • Parisi, Francesco

Abstract

This paper studies the effect of role-reversibility and stochastic ignorance, conditions that minimize the strategic bias of individual choice, on social cooperation. Under role-reversibility, each agent maximizes her expected payoff, knowing the status quo at the time of the action as well as the ex ante probabilities about her future roles. In contrast, under stochastic ignorance, players make their choices under a Harsanyi-type veil of uncertainty. Without the role-specific context influencing the judgment of the individual, cooperative norms emerging under stochastic ignorance are more likely to be close to first-best than are norms chosen under conditions of role-reversibility.

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Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 37 (2008)
Issue (Month): 3 (June)
Pages: 1061-1075

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Handle: RePEc:eee:soceco:v:37:y:2008:i:3:p:1061-1075

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Web page: http://www.elsevier.com/locate/inca/620175

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  1. Greif, Avner, 1989. "Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 857-882, December.
  2. Matthew Haag & Roger Lagunoff, 2002. "On the Size and Structure of Group Cooperation," Wallis Working Papers WP33, University of Rochester - Wallis Institute of Political Economy.
  3. P. Young, 1999. "The Evolution of Conventions," Levine's Working Paper Archive 485, David K. Levine.
  4. Cooter, Robert D., 1994. "Structural adjudication and the new law merchant: A model of decentralized law," International Review of Law and Economics, Elsevier, vol. 14(2), pages 215-231, June.
  5. Francesco Parisi, 1995. "Toward a theory of spontaneous law," Constitutional Political Economy, Springer, vol. 6(3), pages 211-231, October.
  6. John C. Harsanyi, 1955. "Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility," Journal of Political Economy, University of Chicago Press, vol. 63, pages 309.
  7. Klein, Benjamin, 1996. "Why Hold-Ups Occur: The Self-Enforcing Range of Contractual Relationships," Economic Inquiry, Western Economic Association International, vol. 34(3), pages 444-63, July.
  8. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
  9. Bruce Benson, 1992. "Customary law as a social contract: International commercial law," Constitutional Political Economy, Springer, vol. 3(1), pages 1-27, December.
  10. Vincy Fon & Francesco Parisi, 2003. "Reciprocity-Induced Cooperation," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 159(1), pages 76-, March.
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