This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

On the Optimality of the Equality Matching Form of Sociality

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Carmona, Guilherme

Additional information is available for the following registered author(s):

Abstract

We consider a two-player game in which one player can take a costly action (i.e., to provide a favor) that is bene¯cial to the other. The game is in¯nitely repeated and each player is equally likely to be the one who can provide the favor in each period. In this context, equality matching is de¯ned as a strategy in which each player counts the number of times she has given in excess of received and she gives if and only if this number has not reached an upper bound. We show that the equality matching strategy is simple, self-enforcing, symmetric, and irreducible. Furthermore, we show that the utility for each player is at least as high under equality matching as under any other simple, self-enforcing, symmetric, and irreducible strategy of the same complexity. Thus, we rationalize equality matching as being an e±cient way to achieve those properties. This result is applied to risk sharing in village economies and used to rationalize the observed correlations between individual consump- tion and individual income and between present and past transfers across individuals.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://fesrvsd.fe.unl.pt/WPFEUNL/WP2006/wp489.pdf
File Format:
File Function:
Download Restriction: no

Publisher Info
Paper provided by Universidade Nova de Lisboa, Faculdade de Economia in its series FEUNL Working Paper Series with number wp489.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 37 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:unl:unlfep:wp489

Contact details of provider:
Web page: http://www.fe.unl.pt

For technical questions regarding this item, or to correct its listing, contact: (Lourdes Gouveia).

Related research
Keywords:

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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.:
  1. Eliana La Ferrara, 2003. "Kin Groups and Reciprocity: A Model of Credit Transactions in Ghana," American Economic Review, American Economic Association, vol. 93(5), pages 1730-1751, December. [Downloadable!]
    Other versions:
  2. Kocherlakota, Narayana R, 1996. "Implications of Efficient Risk Sharing without Commitment," Review of Economic Studies, Blackwell Publishing, vol. 63(4), pages 595-609, October. [Downloadable!] (restricted)
  3. Abreu, Dilip, 1988. "On the Theory of Infinitely Repeated Games with Discounting," Econometrica, Econometric Society, vol. 56(2), pages 383-96, March. [Downloadable!] (restricted)
  4. Ehud Kalai & William Stanford, 1986. "Finite Rationality and Interpersonal Complexity in Repeated Games," Discussion Papers 679, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
  5. Joseph Henrich et al., 2001. "In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies," American Economic Review, American Economic Association, vol. 91(2), pages 73-78, May. [Downloadable!] (restricted)
    Other versions:
  6. Thorsten Koeppl, 2004. "Differentiability of the Efficient Frontier when Commitment to Risk Sharing is Limited," Working Papers 1049, Queen's University, Department of Economics. [Downloadable!]
    Other versions:
  7. Kandori, Michihiro, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Blackwell Publishing, vol. 59(1), pages 63-80, January. [Downloadable!] (restricted)
  8. Joseph Henrich & Robert Boyd & Samuel Bowles & Colin Camerer & Herbert Gintis & Richard McElreath & Ernst Fehr, 2001. "In Search of Homo Economicus: Experiments in 15 Small-Scale Societies," Artefactual Field Experiments 0059, The Field Experiments Website. [Downloadable!]
  9. Ligon, Ethan & Thomas, Jonathan P & Worrall, Tim, 2002. "Informal Insurance Arrangements with Limited Commitment: Theory and Evidence from Village Economies," Review of Economic Studies, Blackwell Publishing, vol. 69(1), pages 209-44, January.
  10. Atila Abdulkadiroglu & Kyle Bagwell, 2005. "Trust, reciprocity and favors in cooperative relationships," Discussion Papers 0405-22, Columbia University, Department of Economics. [Downloadable!]
  11. Rubinstein, Ariel, 1986. "Finite automata play the repeated prisoner's dilemma," Journal of Economic Theory, Elsevier, vol. 39(1), pages 83-96, June. [Downloadable!] (restricted)
  12. Ehud Kalai, 1987. "Bounded Rationality and Strategic Complexity in Repeated Games," Discussion Papers 783, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  13. Okuno-Fujiwara Masahiro & Postlewaite Andrew, 1995. "Social Norms and Random Matching Games," Games and Economic Behavior, Elsevier, vol. 9(1), pages 79-109, April. [Downloadable!] (restricted)
  14. Ellison, Glenn, 1994. "Cooperation in the Prisoner's Dilemma with Anonymous Random Matching," Review of Economic Studies, Blackwell Publishing, vol. 61(3), pages 567-88, July. [Downloadable!] (restricted)
  15. Townsend, Robert M, 1994. "Risk and Insurance in Village India," Econometrica, Econometric Society, vol. 62(3), pages 539-91, May. [Downloadable!] (restricted)
    Other versions:
  16. Mertens, Jean-Francois, 2002. "Stochastic games," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 3, chapter 47, pages 1809-1832 Elsevier. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? Authors registered on the RePEc Author Service receive monthly emails with details about downloads and abstract views of their works.

This page was last updated on 2009-11-30.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.