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Rational Cooperation In One-Shot Simultaneous Pd-Situations

  • Heiner, Ronald Asher
  • Schmidtchen, Dieter
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    The paper shows that being able to forecast another player's actual cooperation better than pure chance can change players' strategic incentives in a one-shot simultaneous PD-situation. In particular, it is shown that if both players have such ability (to forecast each others' actual choices better than pure chance), then "conditionally cooperative" Nash equilibria may exist in addition to the "always defect" equilibrium. By "conditionally cooperative" we mean that players do not cooperate because of a behavioral "disposition" to act cooperatively, but cooperate rather selectively contingent on their forecasting of the opponent's cooperation (cooperate if and only if each other is forecasted to cooperate).

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    Paper provided by Saarland University, CSLE - Center for the Study of Law and Economics in its series CSLE Discussion Paper Series with number 95-03.

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    Date of creation: 1995
    Date of revision:
    Handle: RePEc:zbw:csledp:9503
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    1. Selten, Reinhard, 1988. "Evolutionary stability in extensive two-person games - correction and further development," Mathematical Social Sciences, Elsevier, vol. 16(3), pages 223-266, December.
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    3. Bolle, Friedel & Ockenfels, Peter, 1990. "Prisoners' Dilemma as a game with incomplete information," Journal of Economic Psychology, Elsevier, vol. 11(1), pages 69-84, March.
    4. Heiner, Ronald A., 1988. "The necessity of imperfect decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 10(1), pages 29-55, July.
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    7. Güth, W. & Kliemt, H., 1993. "Competition or Co-Operation," Discussion Paper 1993-39, Tilburg University, Center for Economic Research.
    8. Philip J. Reny, 1992. "Rationality in Extensive-Form Games," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 103-118, Fall.
    9. Heiner, Ronald A., 1989. "The origin of predictable dynamic behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 12(2), pages 233-257, October.
    10. Joseph Farrell, 1987. "Cheap Talk, Coordination, and Entry," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 34-39, Spring.
    11. Binmore, K & Shaked, A & Sutton, J, 1985. "Testing Noncooperative Bargaining Theory: A Preliminary Study," American Economic Review, American Economic Association, vol. 75(5), pages 1178-80, December.
    12. Sugden, Robert, 1995. "A Theory of Focal Points," Economic Journal, Royal Economic Society, vol. 105(430), pages 533-50, May.
    13. John Geanakoplos, 1992. "Common Knowledge," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 53-82, Fall.
    14. R. Aumann, 2010. "Subjectivity and Correlation in Randomized Strategies," Levine's Working Paper Archive 389, David K. Levine.
    15. Crawford, Vincent P, 1990. "Explicit Communication and Bargaining Outcomes," American Economic Review, American Economic Association, vol. 80(2), pages 213-19, May.
    16. Heiner, Ronald A, 1983. "The Origin of Predictable Behavior," American Economic Review, American Economic Association, vol. 73(4), pages 560-95, September.
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