Thomas Jeitschko () and
Chilei Lau ()
Journal of Economic Behavior & Organization, 2017, vol. 141, issue C, 122-134
This paper considers “soft debt” as a social convention that facilitates long-term reciprocal relationships. A player is said to follow a soft debt strategy if his decisions depend on the entire history with his counterpart only through their accrued soft debt balance. Under discrete benefits, there exist equilibria in which the players keep reciprocating as long as the debt balance does not exceed a certain limit.
Keywords: Social interactions; Reciprocity; Soft debt; Soft transaction; Favor-trading (search for similar items in EconPapers)
JEL-codes: C73 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:141:y:2017:i:c:p:122-134
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