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An Evolutionary Edge of Knowing Less (or: On the "Curse" of Global Information)

  • Stark, Oded
  • Behrens, Doris A.

Consider a population of farmers who live around a lake. Each farmer engages in trade with his two adjacent neighbors. The trade is governed by a prisoner’s dilemma “rule of engagement.” A farmer’s payoff is the sum of the payoffs from the two prisoner’s dilemma games played with his two neighbors. When a farmer dies, his son takes over. The son decides whether to cooperate or defect by considering the actions taken and the payoffs received by the most prosperous members of the group comprising his own father and a set of his father’s neighbors. The size of this set, which can vary, is termed the “span of information.” It is shown that a larger span of information can be detrimental to the stable coexistence of cooperation and defection, and that in well-defined circumstances, a large span of information leads to an end of cooperation, whereas a small span does not. Conditions are outlined under which, when individuals’ optimization is based on the assessment of less information, the social outcome is better than when optimization is based on an assessment of, and a corresponding response to, more information.

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Paper provided by University of Bonn, Center for Development Research (ZEF) in its series Discussion Papers with number 49924.

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Date of creation: Mar 2009
Date of revision:
Handle: RePEc:ags:ubzefd:49924
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  1. Matthew Haag & Roger Lagunoff, 1999. "Social Norms, Local Interaction, and Neighborhood Planning," Game Theory and Information 9907004, EconWPA.
  2. Tackseung Jun & Rajiv Sethi, 2007. "Neighborhood structure and the evolution of cooperation," Journal of Evolutionary Economics, Springer, vol. 17(5), pages 623-646, October.
  3. Theodore C. Bergstrom & Oded Stark, 1994. "How Altruism Can Prevail in an Evolutionary Environment," Microeconomics 9401001, EconWPA.
  4. repec:chk:cuhked:_099 is not listed on IDEAS
  5. Fudenberg, Drew & Levine, David, 1998. "Learning in games," European Economic Review, Elsevier, vol. 42(3-5), pages 631-639, May.
  6. Venkatesh Bala & Sanjeev Goyal, 1998. "Learning from Neighbours," Review of Economic Studies, Oxford University Press, vol. 65(3), pages 595-621.
  7. Glen Ellison, 2010. "Learning, Local Interaction, and Coordination," Levine's Working Paper Archive 391, David K. Levine.
  8. Stark, Oded, 1998. "On the economics of vanishing," Economics Letters, Elsevier, vol. 61(2), pages 261-266, November.
  9. Bisin, Alberto & Horst, Ulrich & Ozgur, Onur, 2006. "Rational expectations equilibria of economies with local interactions," Journal of Economic Theory, Elsevier, vol. 127(1), pages 74-116, March.
  10. Blume Lawrence E., 1993. "The Statistical Mechanics of Strategic Interaction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 387-424, July.
  11. Outkin, Alexander V., 2003. "Cooperation and local interactions in the Prisoners' Dilemma Game," Journal of Economic Behavior & Organization, Elsevier, vol. 52(4), pages 481-503, December.
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