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Stag Hunt with unknown outside options

Author

Listed:
  • Artyom Jelnov

    (Ariel University)

  • Yair Tauman

    (The Interdisciplinary Center
    Stony Brook University)

  • Chang Zhao

    (Nanjing Audit University)

Abstract

We study the Stag Hunt game where two players simultaneously decide whether to cooperate or to choose their outside options (defect). A player’s gain from defection is his private information (the type). The two players’ types are independently drawn from the same cumulative distribution. We focus on the case where only a small proportion of types are dominant (higher than the value from cooperation). It is shown that for a wide family of distribution functions, if the players interact only once, the unique equilibrium outcome is defection by all types of player. Whereas if a second interaction is possible, the players will cooperate with positive probability and already in the first period. Further restricting the family of distributions to those that are sufficiently close to the uniform distribution, cooperation in both period with probability close to 1 is achieved, and this is true even if the probability of a second interaction is very small.

Suggested Citation

  • Artyom Jelnov & Yair Tauman & Chang Zhao, 2021. "Stag Hunt with unknown outside options," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(1), pages 303-335, July.
    • Handle: RePEc:spr:joecth:v:72:y:2021:i:1:d:10.1007_s00199-020-01286-w
    DOI: 10.1007/s00199-020-01286-w
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    References listed on IDEAS

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    Cited by:

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    2. Heller, Yuval & Kuzmics, Christoph, 2020. "Communication, Renegotiation and Coordination with Private Values (Extended Version)," MPRA Paper 102926, University Library of Munich, Germany, revised 26 Jul 2021.
    3. Pi, Jinxiu & Yang, Guanghui & Tang, Wei & Yang, Hui, 2022. "Stochastically stable equilibria for evolutionary snowdrift games with time costs," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 604(C).

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    More about this item

    Keywords

    Stag Hunt; Coordination; Private information; Repeated interaction;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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