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Second thoughts

Author

Listed:
  • Tatsuyoshi Saijo

    (Institute of Economic Research, Hitotsubashi University)

  • Yoshitaka Okano

    (Kochi University of Technology)

Abstract

This paper shows that second thoughts are not an innocent device in our daily life, but is human wisdom that plays an important role in resolving problems such as social dilemmas. We design a simple mechanism to achieve Pareto efficiency in social dilemmas, and then compare the performance of this mechanism with and without second thoughts. First, second thoughts change the payoff structure of the game in favor of cooperation. Second, this mechanism is robust even when players deviate from a payoff maximizing behavior.

Suggested Citation

  • Tatsuyoshi Saijo & Yoshitaka Okano, 2014. "Second thoughts," Working Papers SDES-2014-6, Kochi University of Technology, School of Economics and Management, revised Apr 2015.
    • Handle: RePEc:kch:wpaper:sdes-2014-6
    as

    Download full text from publisher

    File URL: http://www.souken.kochi-tech.ac.jp/seido/wp/SDES-2014-6.pdf
    File Function: First version, 2014
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    References listed on IDEAS

    as
    1. Masuda, Takehito & Okano, Yoshitaka & Saijo, Tatsuyoshi, 2014. "The minimum approval mechanism implements the efficient public good allocation theoretically and experimentally," Games and Economic Behavior, Elsevier, vol. 83(C), pages 73-85.
    2. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    3. Melissa Bateson & Daniel Nettle & Gilbert Roberts, 2006. "Cues of being watched enhance cooperation in a real-world setting," Natural Field Experiments 00214, The Field Experiments Website.
    4. repec:feb:natura:0059 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Xiaochuan Huang & Takehito Masuda & Yoshitaka Okano & Tatsuyoshi Saijo, 2014. "Cooperation among behaviorally heterogeneous players in social dilemma with stay or leave decisions," Working Papers SDES-2014-7, Kochi University of Technology, School of Economics and Management, revised Feb 2015.

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    More about this item

    Keywords

    Second thoughts; Social Dilemma; Cooperation; Mechanism design;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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