On the economic value of repeated interactions under adverse selection
The paper studies, in a repeated interaction setting, how the presence of cooperative agents in a heterogeneous community organized in groups, affects group efficiency and stability. The paper extends the literature by assuming that each type can profitably mimic other types. It is shown that such enlargement of profitable options prevents group stabilization in the single group case. Stabilization can be obtained with many groups, but its driver is not the efficiency gain due to the presence of cooperative individuals. Instead stabilization is the result of free riding opportunities.
|Date of creation:||Oct 2005|
|Date of revision:|
|Contact details of provider:|| Postal: via del Santo, 33 - 35122 Padova|
Phone: +39 +49 8274210
Fax: +39 +49 827.4211
Web page: http://www.decon.unipd.it/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Milgrom, Paul & Roberts, John, 1982.
"Predation, reputation, and entry deterrence,"
Journal of Economic Theory,
Elsevier, vol. 27(2), pages 280-312, August.
- Paul Milgrom & John Roberts, 1980. "Predation, Reputation, and Entry Deterrence," Discussion Papers 427, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Paul Milgrom & John Roberts, 1997. "Predation, reputation , and entry deterrence," Levine's Working Paper Archive 1460, David K. Levine.
- Parikshit Ghosh & Debraj Ray, 1995.
"Cooperation in Community Interaction Without Information Flows,"
Boston University - Institute for Economic Development
64, Boston University, Institute for Economic Development.
- Parikshit Ghosh & Debraj Ray, 1996. "Cooperation in Community Interaction Without Information Flows," Review of Economic Studies, Oxford University Press, vol. 63(3), pages 491-519.
- James E. Rauch & Joel Watson, 1999.
"Starting Small in an Unfamiliar Environment,"
Cowles Foundation Discussion Papers
1218, Cowles Foundation for Research in Economics, Yale University.
- James E. Rauch & Joel Watson, 1999. "Starting Small in an Unfamiliar Environment," NBER Working Papers 7053, National Bureau of Economic Research, Inc.
- Rauch, J E & Watson, Joel, 1999. "Starting Small in an Unfamiliar Environment," University of California at San Diego, Economics Working Paper Series qt4rp145hc, Department of Economics, UC San Diego.
- Kranton, Rachel E, 1996. "The Formation of Cooperative Relationships," Journal of Law, Economics and Organization, Oxford University Press, vol. 12(1), pages 214-33, April.
- Sen, Amartya, 1985. "Goals, Commitment, and Identity," Journal of Law, Economics and Organization, Oxford University Press, vol. 1(2), pages 341-55, Fall.
When requesting a correction, please mention this item's handle: RePEc:pad:wpaper:0007. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Raffaele Dei Campielisi)
If references are entirely missing, you can add them using this form.