On the coevolution of cooperation and social institutions

Verónica Salazar Restrepo and Balázs Szentes

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper examines an environment inhabited by self-interested individuals and unconditional cooperators. The individuals are randomly paired and engage in the Prisoner's Dilemma Game. Cooperation among players is incentivized by institutional capital, and selfish individuals incur a cost to identify situations where defection goes unpunished. In this environment, we explore the coevolution of types and institutional capital, with both the distribution of types and capital evolving through myopic best-response dynamics. The equilibria are shown to be Pareto-ranked. The main finding is that any equilibrium level of institutional capital exceeds the optimal amount in the long run. Thus, forward-looking optimal institutions not only foster a more cooperative culture but are also more cost-effective compared to the myopically optimal ones.

Keywords: cooperation; evolutionary dynamics; prisoner's dilemma (search for similar items in EconPapers)
JEL-codes: J1 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2024-01-01
New Economics Papers: this item is included in nep-evo, nep-gth and nep-hme
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in European Economic Review, 1, January, 2024, 161. ISSN: 0014-2921

Downloads: (external link)
http://eprints.lse.ac.uk/119490/ Open access version. (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:119490

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().