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Achieving Cooperation under Privacy Concerns

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  • Wioletta Dziuda
  • Ronen Gradwohl
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    Abstract

    Two players choose whether to cooperate on a project. Each of them is endowed with some evidence, and if both possess a sufficient amount then cooperation is profitable. In order to facilitate cooperation the players reveal evidence to one another. However, some players are concerned about privacy, and so revelation of evidence that does not result in cooperation is costly. We show that in equilibrium evidence can be exchanged both incrementally and all at once, and identify conditions under which the different rates of evidence exchange are optimal.

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    Bibliographic Info

    Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1572.

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    Date of creation: 05 Nov 2013
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    Handle: RePEc:nwu:cmsems:1572

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    Keywords: Cooperation; Privacy; Communication JEL Classification: D80;

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    1. Navin Kartik, 2008. "Strategic Communication with Lying Costs," 2008 Meeting Papers 350, Society for Economic Dynamics.
    2. V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
    3. Jeremy C. Stein, 2008. "Conversations among Competitors," American Economic Review, American Economic Association, vol. 98(5), pages 2150-62, December.
    4. Leslie M. Marx & Steven A. Matthews, . "Dynamic Voluntary Contribution to a Public Project," Penn CARESS Working Papers 6f8dbf67d492ff8a10975496b, Penn Economics Department.
    5. Lockwood, Ben & Thomas, Jonathan P, 2002. "Gradualism and Irreversibility," Review of Economic Studies, Wiley Blackwell, vol. 69(2), pages 339-56, April.
    6. Watson, Joel, 1999. "Starting Small and Commitment," University of California at San Diego, Economics Working Paper Series qt37p340fc, Department of Economics, UC San Diego.
    7. Admati, Anat R & Perry, Motty, 1991. "Joint Projects without Commitment," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 259-76, April.
    8. Compte, Olivier & Jehiel, Philippe, 2003. "Voluntary contributions to a joint project with asymmetric agents," Journal of Economic Theory, Elsevier, vol. 112(2), pages 334-342, October.
    9. Dziuda, Wioletta, 2011. "Strategic argumentation," Journal of Economic Theory, Elsevier, vol. 146(4), pages 1362-1397, July.
    10. Pitchford, Rohan & Snyder, Christopher M., 2004. "A solution to the hold-up problem involving gradual investment," Journal of Economic Theory, Elsevier, vol. 114(1), pages 88-103, January.
    11. Paul R. Milgrom, 1979. "Good Nevs and Bad News: Representation Theorems and Applications," Discussion Papers 407R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    12. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    13. Watson, Joel, 1999. "Starting Small and Renegotiation," Journal of Economic Theory, Elsevier, vol. 85(1), pages 52-90, March.
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