On the Size and Structure of Group Cooperation

Matthew Haag and Roger Lagunoff ()
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Matthew Haag: University of Warwick

No WP33, Wallis Working Papers from University of Rochester - Wallis Institute of Political Economy

Abstract: This paper examines characteristics of cooperative behavior in a repeated, n-person, continuous action generalization of a Prisoner's Dilemma game. When time preferences are heterogeneous and bounded away from one, how does group cooperation vary with the group's size and structure? For an arbitrary distribution of discount factors, we characterize the maximal average cooperation (MAC) likelihood of this game. The MAC likelihood is the highest average level of cooperation, over all stationary subgame perfect equilibrium paths, in the group. We show that the MAC likelihood is increasing in monotone shifts, and decreasing in mean preserving spreads, of the distribution of discount factors. This suggests that more heterogeneous groups are less cooperative. Finally, we show under certain conditions that the MAC likelihood exhibits increasing returns to scale when discounting is heterogeneous: larger groups are more cooperative than smaller ones. By contrast, when discounting is homogeneous, the MAC likelihood is invariant to group size.

Keywords: Repeated games; maximal average cooperation likelihood; heterogeneous discount factors; returns to scale (search for similar items in EconPapers)
JEL-codes: C7 D62 D7 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth and nep-ind
Date: 2002-10
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Related works:
Working Paper: On the Size and Structure of Group Cooperation (2003)
Working Paper: On the Size and Structure of Group Cooperation (2003)
Working Paper: On the Size and Structure of Group Cooperation (2002)
Working Paper: On the Size and Structure of Group cooperation (2002)
Working Paper: On the Size and Structure of Group Cooperation (2002)
Journal Article: On the size and structure of group cooperation (2007)
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