In addition to pursuing their material self-interest, people are motivated to help those who are kind to them, and to hurt those who are mean to them. Such social preferences influence behavior most when material stakes are small. Rabin (1993) defin es an outcome reflecting such preferences as fairness equilibrium. This paper applies a version of fairness equilibrium to repeated games. Some fairness-equilibrium outcomes in small-stakes, one-shot games are shown to be fairness-equilibrium outcomes e very period in incremental games, which are finitely repeated games of large overall material stakes but very small per-period stakes. For instance, it is a fairness equilibrium for players to cooperate in every period of the finitely repeated Prisoners' Dilemma with arbitrarily high total payoffs, so long as the per-period material payoffs are small. I consider more generally whether fairness equilibria in small-stakes, one shot games can be the stationary fairness-equilibrium outcomes in incremental g ames, providing sufficient and (approximately equivalent) necessary conditions for this result to hold for all fairness preferences meeting my general assumptions. I also show that outcomes that yield either player below her minmax payoffs (which is ofte n true of fairness equilibria in small-stakes, one-shot games) cannot be stationary fairness-equilibrium outcomes for any fairness preferences meeting the general assumptions in incremental games of sufficiently large overall payoffs.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Publisher Info
Paper provided by University of California at Berkeley in its series Economics Working Papers with number
97-252.
Order Information: Postal: IBER, F502 Haas Building, University of California, Berkeley CA 94720-1922 Email:
For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).
Related research
Keywords:
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.)