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Equilibrium Vengeance

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Author Info
Friedman, Daniel
Singh, Nirvikar

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Abstract

This paper introduces two ideas, emotional state dependent utility components (ESDUCs), and evolutionary perfect Bayesian equilibrium (EPBE). Using a simple extensive form game, we illustrate the efficiency-enhancing role of a powerful ESDUC, the vengeance motive. Incorporating behavioral noise and observational noise leads to a range of (short run) Perfect Bayesian equilibria (PBE) involving both vengeful and non-vengeful types. We then derive two (long run) EPBE, one where both types survive and reap mutual gains, and a second where only the non-vengeful type survives and there are no mutual gains.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 766.

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Date of creation: 2002
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Handle: RePEc:ces:ceswps:_766

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Related research
Keywords: negative reciprocity; perfect Bayesian equilibrium; evolutionary perfect Bayesian equilibrium; emotional state dependent utility;

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Find related papers by JEL classification:
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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Cited by:
(explanations, 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.)

  1. Daniel Friedman & Nirvikar Singh, 2004. "Vengefulness Evolves in Small Groups," Game Theory and Information 0412005, EconWPA. [Downloadable!]
    Other versions:
  2. Daniel Friedman & Nirvikar Singh, 2004. "Negative Reciprocity: The Coevolution of Memes and Genes," Game Theory and Information 0412003, EconWPA. [Downloadable!]
    Other versions:
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