The emergence of reciprocally beneficial cooperation
AbstractThis paper offers a new and robust model of the emergence and persistence of cooperation. In the model, interactions are anonymous, the population is well-mixed, and the evolutionary process selects strategies according to material payoffs. The cooperation problem is modelled as a game similar to Prisoner’s Dilemma, but there is an outside option of nonparticipation and the payoff to mutual cooperation is stochastic; with positive probability, this payoff exceeds that from cheating against a cooperator. Under mild conditions, mutually beneficial cooperation occurs in equilibrium. This is possible because the non-participation option holds down the equilibrium frequency of cheating.
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Bibliographic InfoPaper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 18-2010.
Length: 25 pages
Date of creation: Jul 2010
Date of revision:
Cooperation; voluntary participation; random payoffs.;
Find related papers by JEL classification:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-18 (All new papers)
- NEP-CBE-2010-09-18 (Cognitive & Behavioural Economics)
- NEP-EVO-2010-09-18 (Evolutionary Economics)
- NEP-GTH-2010-09-18 (Game Theory)
- NEP-HPE-2010-09-18 (History & Philosophy of Economics)
- NEP-SOC-2010-09-18 (Social Norms & Social Capital)
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- Sergio Beraldo, 2011.
"Good standing and cooperation,"
International Review of Economics,
Springer, vol. 58(1), pages 79-90, March.
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