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Cooperation in a one-shot Prisoners' Dilemma

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  • Harrington, Joseph Jr.

Abstract

In this paper, we model social interactions which are characteristic of large economies. The key properties of this model are: (1) agents are randomly matched over time to engage in a Prisoners' Dilemma; (2) each agent routinely interacts with a proper subset of the other agents; and (3) each agent has highly imperfect information about the past conduct of other agents. For this setting, we show the optimality of a rule of thumb which does not discriminate between encounters with agents that one regularly meets and encounters with agents that one never expects to meet again. This rule of thumb generates cooperative behavior in all encounters. Journal of Economic Literature Classification Numbers: C72, D74.

Suggested Citation

  • Harrington, Joseph Jr., 1995. "Cooperation in a one-shot Prisoners' Dilemma," Games and Economic Behavior, Elsevier, vol. 8(2), pages 364-377.
  • Handle: RePEc:eee:gamebe:v:8:y:1995:i:2:p:364-377
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    References listed on IDEAS

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    1. Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August.
    2. Paul R. Milgrom & Douglass C. North & Barry R. Weingast, 1990. "The Role Of Institutions In The Revival Of Trade: The Law Merchant, Private Judges, And The Champagne Fairs," Economics and Politics, Wiley Blackwell, vol. 2(1), pages 1-23, March.
    3. Neyman, Abraham, 1985. "Bounded complexity justifies cooperation in the finitely repeated prisoners' dilemma," Economics Letters, Elsevier, vol. 19(3), pages 227-229.
    4. Rosenthal, R W, 1979. "Sequences of Games with Varying Opponents," Econometrica, Econometric Society, vol. 47(6), pages 1353-1366, November.
    5. Harrington, Joseph Jr., 1987. "Finite rationalizability and cooperation in the finitely repeated Prisoners' Dilemma," Economics Letters, Elsevier, vol. 23(3), pages 233-237.
    6. Benoit, Jean-Pierre, 1988. "A non-equilibrium analysis of the finitely-repeated prisoner's dilemma," Mathematical Social Sciences, Elsevier, vol. 16(3), pages 281-287, December.
    7. Basu, Kaushik, 1987. "Modeling finitely-repeated games with uncertain termination," Economics Letters, Elsevier, vol. 23(2), pages 147-151.
    8. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 63-80.
    9. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
    10. DANIEL B. KLElN, 1992. "Promise Keeping In The Great Society: A Model Of Credit Information Sharing," Economics and Politics, Wiley Blackwell, vol. 4(2), pages 117-136, July.
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    Citations

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    Cited by:

    1. Illtae Ahn & Matti Suominen, "undated". ""Word-of-Mouth Communication and Community Enforcement''," CARESS Working Papres 96-02, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
    2. Lippert, Steffen & Spagnolo, Giancarlo, 2011. "Networks of relations and Word-of-Mouth Communication," Games and Economic Behavior, Elsevier, vol. 72(1), pages 202-217, May.
    3. Bruno S. Frey & Alois Stutzer, 2001. "Beyond Bentham – Measuring Procedural Utility," CESifo Working Paper Series 492, CESifo Group Munich.
    4. Bruno S. Frey & Alois Stutzer, 2005. "Beyond outcomes: measuring procedural utility," Oxford Economic Papers, Oxford University Press, vol. 57(1), pages 90-111, January.
    5. Joseph E. Harrington, Jr. & Wei Zhao, 2010. "Signaling and Tacit Collusion in an Infinitely Repeated Prisoners' Dilemma," Economics Working Paper Archive 559, The Johns Hopkins University,Department of Economics.
    6. Mari Rege, 2000. "Networking Strategy: Cooperate Today in Order to Meet a Cooperator Tomorrow," Discussion Papers 282, Statistics Norway, Research Department.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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