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Reciprocity-Induced Cooperation

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  • 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.

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Bibliographic Info

Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 159 (2003)
Issue (Month): 1 (March)
Pages: 76-

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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. 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.
  2. Fon, Vincy & Parisi, Francesco, 2003. "Stability and Change in International Customary Law," Berkeley Olin Program in Law & Economics, Working Paper Series qt0t46t705, Berkeley Olin Program in Law & Economics.

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