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On the stability of cooperation under indirect reciprocity with first-order information

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  • Berger, Ulrich
  • Grüne, Ansgar

Abstract

Indirect reciprocity describes a class of reputation-based mechanisms which may explain the prevalence of cooperation in large groups where partners meet only once. The first model for which this has been demonstrated was the image scoring mechanism. But analytical work on the simplest possible case, the binary scoring model, has shown that even small errors in implementation destabilize any cooperative regime. It has thus been claimed that for indirect reciprocity to stabilize cooperation, assessments of reputation must be based on higher-order information. Is indirect reciprocity relying on first-order information doomed to fail? We use a simple analytical model of image scoring to show that this need not be the case. Indeed, in the general image scoring model the introduction of implementation errors has just the opposite effect as in the binary scoring model: it may stabilize instead of destabilize cooperation.

Suggested Citation

  • Berger, Ulrich & Grüne, Ansgar, 2016. "On the stability of cooperation under indirect reciprocity with first-order information," Games and Economic Behavior, Elsevier, vol. 98(C), pages 19-33.
  • Handle: RePEc:eee:gamebe:v:98:y:2016:i:c:p:19-33
    DOI: 10.1016/j.geb.2016.05.003
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    References listed on IDEAS

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    Cited by:

    1. Yuval Heller & Erik Mohlin, 2018. "Observations on Cooperation," Review of Economic Studies, Oxford University Press, vol. 85(4), pages 2253-2282.
    2. Ingela Alger & Jörgen W. Weibull, 2017. "Strategic Behavior of Moralists and Altruists," Games, MDPI, Open Access Journal, vol. 8(3), pages 1-21, September.

    More about this item

    Keywords

    Cooperation; Prisoner's dilemma; Donation game; Indirect reciprocity; Image scoring; First-order assessment; First-order information; Evolutionary stability;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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