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Achieving Cooperation under Privacy Concerns

  • Wioletta Dziuda
  • Ronen Gradwohl
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    Two players choose whether to cooperate on a project. Each of them is endowed with some evidence, and if both possess a sufficient amount then cooperation is profitable. In order to facilitate cooperation the players reveal evidence to one another. However, some players are concerned about privacy, and so revelation of evidence that does not result in cooperation is costly. We show that in equilibrium evidence can be exchanged both incrementally and all at once, and identify conditions under which the different rates of evidence exchange are optimal.

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    File URL: http://www.kellogg.northwestern.edu/research/math/papers/1572.pdf
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    Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1572.

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    Date of creation: 05 Nov 2013
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    Handle: RePEc:nwu:cmsems:1572
    Contact details of provider: Postal: Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014
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    Fax: 847/491-2530
    Web page: http://www.kellogg.northwestern.edu/research/math/
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    1. Ben Lockwood & Jonathan P. Thomas, 2002. "Gradualism and Irreversibility," Review of Economic Studies, Oxford University Press, vol. 69(2), pages 339-356.
    2. Jeremy C. Stein, 2008. "Conversations among Competitors," American Economic Review, American Economic Association, vol. 98(5), pages 2150-62, December.
    3. Watson, Joel, 2002. "Starting Small and Commitment," Games and Economic Behavior, Elsevier, vol. 38(1), pages 176-199, January.
    4. Dziuda, Wioletta, 2011. "Strategic argumentation," Journal of Economic Theory, Elsevier, vol. 146(4), pages 1362-1397, July.
    5. Marx, Leslie M & Matthews, Steven A, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Wiley Blackwell, vol. 67(2), pages 327-58, April.
    6. Bernhard Ganglmair & Emanuele Tarantino, 2014. "Conversation with secrets," RAND Journal of Economics, RAND Corporation, vol. 45(2), pages 273-302, 06.
    7. Compte, Olivier & Jehiel, Philippe, 2003. "Voluntary contributions to a joint project with asymmetric agents," Journal of Economic Theory, Elsevier, vol. 112(2), pages 334-342, October.
    8. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
    9. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-51, November.
    10. Pitchford, Rohan & Snyder, Christopher M., 2004. "A solution to the hold-up problem involving gradual investment," Journal of Economic Theory, Elsevier, vol. 114(1), pages 88-103, January.
    11. Navin Kartik, 2008. "Strategic Communication with Lying Costs," 2008 Meeting Papers 350, Society for Economic Dynamics.
    12. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    13. Admati, Anat R & Perry, Motty, 1991. "Joint Projects without Commitment," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 259-76, April.
    14. Watson, Joel, 1999. "Starting Small and Renegotiation," Journal of Economic Theory, Elsevier, vol. 85(1), pages 52-90, March.
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