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Reciprocity-Induced Cooperation

Author

Listed:
  • Vincy Fon
  • Francesco Parisi

Abstract

Many legal systems foster metarules of reciprocity to facilitate cooperative outcomes. This paper considers the role of reciprocity rules in various strategic environments. We start by considering the effect of reciprocity constraints in a classic prisoners' dilemma with two symmetric parties and linear payoffs. We extend the analysis to continuous strategies and then further extend the basic model of reciprocity to (a) asymmetric players and (b) nonlinear payoff functions. Then we examine the welfare properties of the reciprocity-induced equilibrium. In many game-theoretic situations, reciprocity constraints facilitate the achievement of cooperative outcomes. Yet the reciprocity-induced equilibrium is not always socially optimal.

Suggested Citation

  • Vincy Fon & Francesco Parisi, 2003. "Reciprocity-Induced Cooperation," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 159(1), pages 76-92, March.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200303)159:1_76:rc_2.0.tx_2-x
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    Cited by:

    1. Vincy Fon & Francesco Parisi, "undated". "Stability and Change in International Customary Law," American Law & Economics Association Annual Meetings 1021, American Law & Economics Association.
    2. Zdybel, Karol B., 2024. "Norms among heterogeneous agents: a rational-choice model," ILE Working Paper Series 78, University of Hamburg, Institute of Law and Economics.
    3. Fon, Vincy & Parisi, Francesco, 2008. "Role-reversibility, stochastic ignorance, and social cooperation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(3), pages 1061-1075, June.

    More about this item

    JEL classification:

    • K0 - Law and Economics - - General
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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