Will you cooperate in case the payoff can be guaranteed?

Xiaoyang Zhang, Tong Chen, Qiao Chen and Xueya Li

Chaos, Solitons & Fractals, 2020, vol. 130, issue C

Abstract: To reduce the risk of cooperators being hitchhiked so as to promote cooperation, this paper proposes a kind of insurance-like incentive mechanism, which integrates the advantages of reward and insurance. This paper uses an agent-based model to simulate the feasibility of the insurance-like incentive. The changes in the fraction of cooperators and net profit influenced by different extra-charges and incentive rates are analyzed. And evolutionary results show that with the introduction of such an insurance-like incentive mechanism, cooperators ultimately dominate the situation, and the value of the net profit of organizer becomes higher than without this mechanism. The lower the extra-charge, or the higher the incentive rate, the easier the cooperation will be. Moreover, the proper match between extra-charge and incentive rate can help organizers achieve the optimal effect of encouraging collective donation. Through this mechanism, the incentive costs can be saved noticeably, and there are no second-order exploiters. The risk of cooperators of being exploited can be reduced by paying the extra-charges. And cooperators may continue to increase their contributions even if there are no defectors in the system.

Keywords: Insurance-like incentive mechanism; Extra-charge; Incentives; Public goods game; Cooperation (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chsofr:v:130:y:2020:i:c:s0960077919303649

DOI: 10.1016/j.chaos.2019.109423

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