Social pressure, uncertainty, and cooperation

Steffen Huck and Dorothea Kübler

Economics of Governance, 2000, vol. 1, issue 3, 199-212

Abstract: We analyse the role of uncertainty in a sequential game where players have to decide whether to contribute to a public project or not. A player's payoff may depend on his belief about the other player's action which allows us to model social pressure. Using the theory of psychological games, we show that the players' propensity to choose an individually costly action such as cooperation in a public project may increase if there is some uncertainty about who has cooperated before. A central agency, e.g. the government, can induce incomplete information by using a randomization policy, thus crowding in private contributions. Copyright Springer-Verlag Berlin Heidelberg 2000

Keywords: Key words: social pressure; psychological games; cooperation; JEL classification: C72; H41 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:spr:ecogov:v:1:y:2000:i:3:p:199-212

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