Cooperation and Cognition in Social Networks

Edoardo Gallo, Joseph Lee, Yohanes Riyanto and Erwin Wong

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Abstract: Social networks can sustain cooperation by amplifying the consequences of a single defection through a cascade of relationship losses. Building on Jackson et al. (2012), we introduce a novel robustness notion to characterize low cognitive complexity (LCC) networks - a subset of equilibrium networks that imposes a minimal cognitive burden to calculate and comprehend the consequences of defection. We test our theory in a laboratory experiment and find that cooperation is higher in equilibrium than in non-equilibrium networks. Within equilibrium networks, LCC networks exhibit higher levels of cooperation than non-LCC networks. Learning is essential for the emergence of equilibrium play.

Date: 2023-05
New Economics Papers: this item is included in nep-des, nep-evo, nep-exp, nep-gth, nep-mic, nep-net, nep-neu, nep-soc and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2305.01209

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