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Choosing Opponents in Games of Cooperation and Coordination

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Author Info

  • Engseld, Peter

    (Department of Economics, Lund University)

  • Bergh, Andreas

    ()
    (Department of Economics, Lund University)

Abstract

We analyze a cooperation game and a coordination game in an evolutionary environment. Agents make noisy observations of opponent's propensity to play dove, called reputation, and form preferences over opponents based on their reputation. A game takes place when two agents agree to play. Socially optimal cooperation is evolutionarily stable when reputation perfectly reflects propensity to cooperate. With some reputation noise, there will be at least some cooperation. Individual concern for reputation results in a seemingly altruistic behavior. The degree of cooperation is decreasing in anonymity. If reputation is noisy enough, there is no cooperation in equilibrium. In the coordination game, the efficient equilibrium is chosen and agents with better skills to observe reputation earn more.

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Bibliographic Info

Paper provided by Lund University, Department of Economics in its series Working Papers with number 2005:1.

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Length: 25 pages
Date of creation: 04 Jan 2005
Date of revision: 03 May 2005
Handle: RePEc:hhs:lunewp:2005_001

Note: This paper has been replaced by 2005:45 "Choosing Opponents in Prisoners’ Dilemma: An Evolutionary Analysis"
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Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
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Related research

Keywords: Cooperation; Coordination; Conditioned Strategies; Prisoners Dilemma; Signaling; Reputation; Altruism; Evolutionary Equilibrium;

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References

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  1. Eric Alden Smith & Samuel Bowles & Herbert Gintis, 2000. "Costly Signaling and Cooperation," Working Papers 00-12-071, Santa Fe Institute.
  2. Kandori, M. & Mailath, G.J., 1991. "Learning, Mutation, And Long Run Equilibria In Games," Papers 71, Princeton, Woodrow Wilson School - John M. Olin Program.
  3. Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, vol. 86(3), pages 653-60, June.
  4. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
  5. Ernst Fehr & Urs Fischbacher, 2004. "The nature of human altruism," Experimental 0402003, EconWPA.
  6. Kevin McCabe & Mary Rigdon & Vernon Smith, 2004. "Sustaining Cooperation in trust Games," Experimental 0403005, EconWPA.
  7. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," Working Papers 02-06, Department of Economics, Appalachian State University.
  8. Ernst Fehr & Simon Gaechter, 2003. "Altruistic Punishment in Humans," Microeconomics 0305006, EconWPA.
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Cited by:
  1. Bergh, Andreas & Engseld, Peter, 2005. "The Problem of Cooperation and Reputation Based Choice," Working Papers 2005:27, Lund University, Department of Economics, revised 04 May 2006.

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