Tit for Tattling: Cooperation, communication, and how each could stabilize the other

Victor Vikram Odouard and Michael Holton Price

Papers from arXiv.org

Abstract: Indirect reciprocity is a mechanism by which individuals cooperate with those who have cooperated with others. This creates a regime in which repeated interactions are not necessary to incent cooperation (as would be required for direct reciprocity). However, indirect reciprocity creates a new problem: how do agents know who has cooperated with others? To know this, agents would need to access some form of reputation information. Perhaps there is a communication system to disseminate reputation information, but how does it remain truthful and informative? Most papers assume the existence of a truthful, forthcoming, and informative communication system; in this paper, we seek to explain how such a communication system could remain evolutionarily stable in the absence of exogenous pressures. Specifically, we present three conditions that together maintain both the truthfulness of the communication system and the prevalence of cooperation: individuals (1) use a norm that rewards the behaviors that it prescribes (an aligned norm), (2) can signal not only about the actions of other agents, but also about their truthfulness (by acting as third party observers to an interaction), and (3) make occasional mistakes, demonstrating how error can create stability by introducing diversity.

Date: 2022-01, Revised 2023-08
New Economics Papers: this item is included in nep-evo and nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2201.06792

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