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Choosing Opponents in Prisoners' Dilemma: An Evolutionary Analysis

  • Engseld, Peter

    (Department of Economics, Lund University)

  • Bergh, Andreas

    ()

    (Department of Economics, Lund University)

We analyze a cooperation game in an evolutionary environment. Agents make noisy observations of opponents’ propensity to cooperate, called reputation, and form preferences over opponents based on their reputation. A game takes place when two agents agree to play. Pareto optimal cooperation is evolutionarily stable when reputation perfectly reflects propensity to cooperate. With some reputation noise, there will be at least some cooperation. Individual concern for reputation results in a seemingly altruistic behavior. The degree of cooperation is decreasing in anonymity. If reputation is noisy enough, there is no cooperation in equilibrium.

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File URL: http://project.nek.lu.se/publications/workpap/Papers/WP05_45.pdf
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Paper provided by Lund University, Department of Economics in its series Working Papers with number 2005:45.

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Length: 23 pages
Date of creation: 29 Nov 2005
Date of revision:
Handle: RePEc:hhs:lunewp:2005_045
Contact details of provider: Postal:
Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden

Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en

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  1. Larry Samuelson, 1998. "Evolutionary Games and Equilibrium Selection," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262692198, March.
  2. Ernst Fehr & Klaus M. Schmidt, . "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers 004, Institute for Empirical Research in Economics - University of Zurich.
  3. Rigdon, Mary & McCabe, Kevin & Smith, Vernon, 2001. "Sustaining cooperation in trust games," MPRA Paper 2006, University Library of Munich, Germany, revised 23 Apr 2006.
  4. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
  5. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
  6. Jackson, Matthew O. & Watts, Alison, 2005. "Social Games: Matching and the play of finitely repeated games," Working Papers 1212, California Institute of Technology, Division of the Humanities and Social Sciences.
  7. Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, vol. 86(3), pages 653-60, June.
  8. Ken Binmore & Larry Samuelson, 1999. "Evolutionary Drift and Equilibrium Selection," Review of Economic Studies, Oxford University Press, vol. 66(2), pages 363-393.
  9. Rafael Rob & Huanxing Yang, 2006. "Long Term Relationships as Safeguards," Levine's Working Paper Archive 618897000000001039, David K. Levine.
  10. Binmore, K. & Samuelson, L., 1995. "Evolutionary Drift and Equilibrium Selection," Working papers 9529, Wisconsin Madison - Social Systems.
  11. Robson, A.J., 1989. "Efficiency In Evolutionary Games: Darwin, Nash And Secret Handshake," Papers 89-22, Michigan - Center for Research on Economic & Social Theory.
  12. Ernst Fehr & Urs Fischbacher, 2004. "The nature of human altruism," Experimental 0402003, EconWPA.
  13. Gordon Tullock, 1985. "Adam Smith and the Prisoners' Dilemma," The Quarterly Journal of Economics, Oxford University Press, vol. 100(Supplemen), pages 1073-1081.
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