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An evolutionary edge of knowing less (or: On the ‘curse’ of global information)

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  • Oded Stark

    ()

  • Doris Behrens

    ()

Abstract

Consider a population of farmers who live around a lake. Each farmer engages in trade with his two adjacent neighbors. The trade is governed by a prisoner’s dilemma “rule of engagement.” A farmer’s payoff is the sum of the payoffs from the two prisoner’s dilemma games played with his two neighbors. When a farmer dies, his son takes over. The son decides whether to cooperate or defect by considering the actions taken and the payoffs received by the most prosperous members of the group comprising his own father and a set of his father’s neighbors. The size of this set, which can vary, is termed the “span of information.” It is shown that a larger span of information can be detrimental to the stable coexistence of cooperation and defection, and that in well-defined circumstances, a large span of information leads to an end of cooperation, whereas a small span does not. Conditions are outlined under which, when individuals’ optimization is based on the assessment of less information, the social outcome is better than when optimization is based on an assessment of, and a corresponding response to, more information.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s00191-009-0137-9
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Bibliographic Info

Article provided by Springer in its journal Journal of Evolutionary Economics.

Volume (Year): 20 (2010)
Issue (Month): 1 (January)
Pages: 77-94

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Handle: RePEc:spr:joevec:v:20:y:2010:i:1:p:77-94

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Web page: http://link.springer.de/link/service/journals/00191/index.htm

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Related research

Keywords: Span of interaction; Span of information; Imitation; Social welfare; D83; R12; O4;

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References

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  1. Ellison, Glenn, 1993. "Learning, Local Interaction, and Coordination," Econometrica, Econometric Society, vol. 61(5), pages 1047-71, September.
  2. Blume Lawrence E., 1993. "The Statistical Mechanics of Strategic Interaction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 387-424, July.
  3. Matthew Haag & Roger Lagunoff, 2006. "Social Norms, Local Interaction, And Neighborhood Planning ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 265-296, 02.
  4. Bergstrom, Theodore C & Stark, Oded, 1993. "How Altruism Can Prevail in an Evolutionary Environment," American Economic Review, American Economic Association, vol. 83(2), pages 149-55, May.
  5. Drew Fudenberg & David K. Levine, 1998. "Learning in Games," Levine's Working Paper Archive 2222, David K. Levine.
  6. Bala, V. & Goyal, S., 1995. "Learning from Neighbors," Econometric Institute Research Papers EI 9549-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
  7. Stark, Oded, 1998. "On the economics of vanishing," Economics Letters, Elsevier, vol. 61(2), pages 261-266, November.
  8. Outkin, Alexander V., 2003. "Cooperation and local interactions in the Prisoners' Dilemma Game," Journal of Economic Behavior & Organization, Elsevier, vol. 52(4), pages 481-503, December.
  9. Bisin, Alberto & Horst, Ulrich & Ozgur, Onur, 2006. "Rational expectations equilibria of economies with local interactions," Journal of Economic Theory, Elsevier, vol. 127(1), pages 74-116, March.
  10. Tackseung Jun & Rajiv Sethi, 2008. "Neighborhood structure and the evolution of cooperation," Journal of Evolutionary Economics, Springer, vol. 18(1), pages 103-103, February.
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Citations

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Cited by:
  1. Waltman, L. & van Eck, N.J.P. & Dekker, R. & Kaymak, U., 2011. "An evolutionary model of price competition among spatially distributed firms," Econometric Institute Research Papers EI 2011-09, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
  2. Stark, Oded & Jakubek, Marcin, 2011. "Is population growth conducive to the sustainability of cooperation?," University of Tuebingen Working Papers in Economics and Finance 15, University of Tuebingen, Faculty of Economics and Social Sciences.
  3. Tristan Boyer & Nicolas Jonard, 2014. "Imitation and Efficient Contagion," Working Papers 2014-052, Department of Research, Ipag Business School.
  4. Matthias Greiff, 2013. "Rewards and the private provision of public goods on dynamic networks," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1001-1021, November.

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