Can a Grain of Patience Trigger Cooperation? The Role of an Outside Option

Omer Moav (), Luigi Pascali and Ady Pauzner
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Luigi Pascali: UPF & LUISS
Ady Pauzner: Tel Aviv University & Reichman University

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Cooperation in joint ventures is widespread, despite its vulnerability to defection. It can emerge when the interaction is repeated and agents are patient enough to prefer the benefits of future cooperation over the short-term gains from defection. Thus, if a large fraction of the population consists of impatient exploiters who always defect and agents are randomly paired to play a repeated prisoner dilemma game, patient agents defect as well, and society is in a no-cooperation trap. We show that the existence of an outside option can break this trap even if the fraction of patient agents is arbitrarily small. Impatient agents self-select out of the game, allowing patient agents to cooperate. Patience thus has an evolutionary advantage, leading to widespread cooperation.

Date: 2025
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