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Choosing Opponents in Prisoners' Dilemma: An Evolutionary Analysis

Author

Listed:
  • Engseld, Peter

    (Department of Economics, Lund University)

  • Bergh, Andreas

    () (Department of Economics, Lund University)

Abstract

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.

Suggested Citation

  • Engseld, Peter & Bergh, Andreas, 2005. "Choosing Opponents in Prisoners' Dilemma: An Evolutionary Analysis," Working Papers 2005:45, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2005_045
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    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP05_45.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Cooperation; Conditioned Strategies; Prisoners Dilemma; Signaling; Reputation; Altruism; Evolutionary Equilibrium;

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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