Noisy Identity and Cooperation

Carmen Astorne

Journal of Economic Behavior & Organization, 2023, vol. 207, issue C, 203-234

Abstract: When meeting a random stranger, it can be difficult to recognize who is like you (ingroup) and who is not (outgroup). I construct a model to explore how noise in detecting whether the other player is an ingroup or an outgroup impacts overall cooperation in strategic interactions. When the game is repeated, noisy identity can generate welfare gains that are not possible with perfect recognition by encouraging players to cooperate in all periods except the last one, regardless of how they identified the opponent. Importantly, noisy identity can sustain additional cooperation even when the potential cost of doing so is high. This result is largely driven by the level of noise in detecting who is an outgroup, whereas the role in recognizing an ingroup is less prominent.

Keywords: Cooperation; Social identity; Noisy identity; Pure altruism; Prisoners’ Dilemma (search for similar items in EconPapers)
JEL-codes: C72 C73 D64 D91 Z13 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:207:y:2023:i:c:p:203-234

DOI: 10.1016/j.jebo.2023.01.007

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