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The emergence of reciprocally beneficial cooperation

  • Sergio Beraldo

    ()

  • Robert Sugden

    ()

This paper offers a new and robust model of the emergence and persistence of cooperation. In the model, interactions are anonymous, the population is well-mixed, and the evolutionary process selects strategies according to material payoffs. The cooperation problem is modelled as a game similar to Prisoner’s Dilemma, but there is an outside option of nonparticipation and the payoff to mutual cooperation is stochastic; with positive probability, this payoff exceeds that from cheating against a cooperator. Under mild conditions, mutually beneficial cooperation occurs in equilibrium. This is possible because the non-participation option holds down the equilibrium frequency of cheating.

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File URL: http://servizi.sme.unito.it/icer_repec/RePEc/icr/wp2010/ICERwp18-10.pdf
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Paper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 18-2010.

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Length: 25 pages
Date of creation: Jul 2010
Date of revision:
Handle: RePEc:icr:wpicer:18-2010
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  1. Nikiforakis, Nikos, 2008. "Punishment and counter-punishment in public good games: Can we really govern ourselves," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 91-112, February.
  2. Colin Camerer & Ernst Fehr & Herbert Gintis & Joseph Henrich & Richard McElreath & Robert Boyd & Samuel Bowles, 2001. "In search of homo economicus: Experiments in 15 small-scale societies," Artefactual Field Experiments 00068, The Field Experiments Website.
  3. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
  4. Joseph Henrich, 2001. "In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies," American Economic Review, American Economic Association, vol. 91(2), pages 73-78, May.
  5. Ken Binmore, 1994. "Game Theory and the Social Contract, Volume 1: Playing Fair," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262023636, August.
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