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Organizations and Overlapping Generations Games: Memory, Communication, and Altruism

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Author Info

  • Roger Lagunoff

    (Georgetown University)

  • Akihiko Matsui

    (University of Tokyo)

Abstract

This paper studies the role of memory and communication in games between ongoing organizations. In each organization, each individual, upon entry into the game, replaces his predecessor who has the same preferences and faces the same strategic possibilities. Entry across distinct organizations are asynchronous: no two individuals alive at a date t have entered at the same time. We model these as repeated games between overlapping generations of individuals (OLG games). It has been shown elsewhere that Folk Theorems hold in OLG games with long enough lived individuals who can perfectly observe the past. However, the Folk Theorem fails for many games when individuals have no prior memory, i.e., no individual can witness events that occur before his entry into the game. We examine OLG games without prior memory. We then examine such games when the past can be communicated by one generation to the next through ``cheap talk" communication. With costly communication, an approximate Folk Theorem holds only when there is some altruistic link between cohorts in an organization. The equilibria in this Folk Theorem require a special form of intergenerational sanctions. In these sanctions, punishment is sometimes carried out long after both victim and perpetrator have left the game. Without this special structure, altruism may in fact destroy cooperation when it would otherwise be possible.

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File URL: http://128.118.178.162/eps/game/papers/0103/0103002.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Game Theory and Information with number 0103002.

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Length: 28 pages
Date of creation: 04 Apr 2001
Date of revision:
Handle: RePEc:wpa:wuwpga:0103002

Note: Type of Document - LaTex/pdf ; prepared on IBM PC ; to print on HP/PostScript; pages: 28 ; figures: included. We have benefitted from helpful comments and conversations with Luca Anderlini, Hans Haller, and Takashi Shimizu. This research is partially supported by grants-in-aid for scientific research of the Ministry of Education of Japan.
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Web page: http://128.118.178.162

Related research

Keywords: Organizations; Overlapping Generations Games; Memory; Communication; Altruism.;

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Cited by:
  1. Roger Lagunoff, 2002. "Credible Communication in Dynastic Government," Working Papers gueconwpa~02-02-04, Georgetown University, Department of Economics.
  2. Conconi, Paola & Sahuguet, Nicolas, 2005. "Re-election Incentives and the Sustainability of International Cooperation," CEPR Discussion Papers 5401, C.E.P.R. Discussion Papers.
  3. Roger Lagunoff & Dino Gerardi & Luca Anderlini, 2008. "Communication and Learning," Working Papers gueconwpa~08-08-01, Georgetown University, Department of Economics.
  4. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2007. "Social Memory and Evidence from the Past," Working Papers gueconwpa~07-07-01, Georgetown University, Department of Economics.
  5. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2004. "The Folk Theorem in Dynastic Repeated Games," Levine's Bibliography 122247000000000577, UCLA Department of Economics.
  6. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2008. "A “Super” Folk Theorem for dynastic repeated games," Economic Theory, Springer, vol. 37(3), pages 357-394, December.
  7. Ando, Munetomo & Kobayashi, Hajime, 2008. "Intergenerational conflicts of interest and seniority systems in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 757-767, March.

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