In search of an evolutionary edge: trading with a few, more, or many
AbstractConsider a population of farmers who live around a lake. Each farmer engages in trade with his m adjacent neighbors, where m is termed the "span of interaction." Trade is governed by a prisoner’s dilemma "rule of engagement." A farmer’s payoff is the sum of the payoffs from the m prisoner’s dilemma games played with his m/2 neighbors to the left, and with his m/2 neighbors to the right. When a farmer dies, his son takes over. The son who adheres to his father’s span of interaction decides whether to cooperate or defect by considering the actions taken and the payoffs received by the most prosperous member of the group comprising his father and his father’s m trading partners. Under a conventional structure of payoffs, it is shown that a large span of interaction is detrimental to the long-run coexistence of cooperation and defection, and conditions are provided under which the social outcome associated with the expansion of trade when individuals trade with a few is better than that when they trade with many. Under the stipulated conditions it is shown, by means of a static comparative analysis of the steady state configurations of the farmer population, that an expansion of the market can be beneficial in one context, detrimental in another.
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.
Bibliographic InfoPaper provided by University of Bonn, Center for Development Research (ZEF) in its series Discussion Papers with number 94280.
Date of creation: Sep 2010
Date of revision:
Local interaction; Span of interaction; Imitation; Cooperation; Social welfare; Farm Management; D83; R12; O4;
Other versions of this item:
- Oded Stark & Doris Behrens, 2011. "In search of an evolutionary edge: trading with a few, more, or many," Journal of Evolutionary Economics, Springer, vol. 21(5), pages 721-736, December.
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
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.:
- Tackseung Jun & Rajiv Sethi, 2008.
"Neighborhood structure and the evolution of cooperation,"
Journal of Evolutionary Economics,
Springer, vol. 18(1), pages 103-103, February.
- Tackseung Jun & Rajiv Sethi, 2007. "Neighborhood structure and the evolution of cooperation," Journal of Evolutionary Economics, Springer, vol. 17(5), pages 623-646, October.
- Mengel, Friederike, 2007.
"Conformism and Cooperation in a Local Interaction Model,"
4051, University Library of Munich, Germany.
- Friederike Mengel, 2009. "Conformism and cooperation in a local interaction model," Journal of Evolutionary Economics, Springer, vol. 19(3), pages 397-415, June.
- Robert Hoffmann & Nigel Waring, 1996. "The Localisation of Interaction and Learning in the Repeated Prisoner's Dilemma," Working Papers 96-08-064, Santa Fe Institute.
- Alós-Ferrer, Carlos & Weidenholzer, Simon, 2008. "Contagion and efficiency," Journal of Economic Theory, Elsevier, vol. 143(1), pages 251-274, November.
- Ellison, Glenn, 1993.
"Learning, Local Interaction, and Coordination,"
Econometric Society, vol. 61(5), pages 1047-71, September.
- Merrill M. Flood, 1958. "Some Experimental Games," Management Science, INFORMS, vol. 5(1), pages 5-26, October.
- Stark, Oded & Jakubek, Marcin, 2011.
"Is population growth conducive to the sustainability of cooperation?,"
109965, University of Bonn, Center for Development Research (ZEF).
- Stark, Oded & Jakubek, Marcin, 2011. "Is population growth conducive to the sustainability of cooperation?," Economics & Human Biology, Elsevier, vol. 9(4), pages 443-451.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.