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Observations on Cooperation

Heller, Yuval and Mohlin, Erik LU (2018) In Review of Economic Studies 85(4). p.2253-2282
Abstract
We study environments in which agents are randomly matched to play a Prisoner’s Dilemma, and each player observes a few of the partner’s past actions against previous opponents. We depart from the existing related literature by allowing a small fraction of the population to be commitment types. The presence of committed agents destabilizes previously proposed mechanisms for sustaining cooperation. We present a novel intuitive combination of strategies that sustains cooperation in various environments. Moreover, we show that under an additional assumption of stationarity, this combination of strategies is essentially the unique mechanism to support full cooperation, and it is robust to various perturbations. Finally, we extend the results... (More)
We study environments in which agents are randomly matched to play a Prisoner’s Dilemma, and each player observes a few of the partner’s past actions against previous opponents. We depart from the existing related literature by allowing a small fraction of the population to be commitment types. The presence of committed agents destabilizes previously proposed mechanisms for sustaining cooperation. We present a novel intuitive combination of strategies that sustains cooperation in various environments. Moreover, we show that under an additional assumption of stationarity, this combination of strategies is essentially the unique mechanism to support full cooperation, and it is robust to various perturbations. Finally, we extend the results to a setup in which agents also observe actions played by past opponents against the current partner, and we characterize which observation structure is optimal for sustaining cooperation. (Less)
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author
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organization
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type
Contribution to journal
publication status
published
subject
in
Review of Economic Studies
volume
85
issue
4
pages
30 pages
publisher
Oxford University Press
external identifiers
  • scopus:85050287368
ISSN
0034-6527
DOI
10.1093/restud/rdx076
language
English
LU publication?
yes
id
f0887c4a-c094-4c2d-baa2-9b4866d8606e
alternative location
http://www.restud.com/wp-content/uploads/2017/12/MS24086manuscript.pdf
date added to LUP
2017-12-19 21:08:29
date last changed
2021-10-06 02:29:45
@article{f0887c4a-c094-4c2d-baa2-9b4866d8606e,
  abstract     = {We study environments in which agents are randomly matched to play a Prisoner’s Dilemma, and each player observes a few of the partner’s past actions against previous opponents. We depart from the existing related literature by allowing a small fraction of the population to be commitment types. The presence of committed agents destabilizes previously proposed mechanisms for sustaining cooperation. We present a novel intuitive combination of strategies that sustains cooperation in various environments. Moreover, we show that under an additional assumption of stationarity, this combination of strategies is essentially the unique mechanism to support full cooperation, and it is robust to various perturbations. Finally, we extend the results to a setup in which agents also observe actions played by past opponents against the current partner, and we characterize which observation structure is optimal for sustaining cooperation.},
  author       = {Heller, Yuval and Mohlin, Erik},
  issn         = {0034-6527},
  language     = {eng},
  month        = {10},
  number       = {4},
  pages        = {2253--2282},
  publisher    = {Oxford University Press},
  series       = {Review of Economic Studies},
  title        = {Observations on Cooperation},
  url          = {http://dx.doi.org/10.1093/restud/rdx076},
  doi          = {10.1093/restud/rdx076},
  volume       = {85},
  year         = {2018},
}