Risk aversion can promote cooperation

Jay Armas, Wout Merbis, Janusz Meylahn, Soroush Rafiee Rad and Mauricio J. del Razo

Papers from arXiv.org

Abstract: Cooperative dynamics are central to our understanding of many phenomena in living and complex systems. However, we lack a universal mechanism to explain the emergence of cooperation. We present a novel framework for modelling social dilemma games with an arbitrary number of players by combining reaction networks, methods from quantum mechanics applied to stochastic complex systems, game theory and stochastic simulations of molecular reactions. Using this framework, we propose a novel and robust mechanism for cooperation based on risk aversion that leads to cooperative behaviour in population games. Rather than individuals seeking to maximise payouts in the long run, individuals seek to obtain a minimum set of resources with a given level of confidence and in a limited time span. We show that this mechanism can lead to the emergence of new equilibria in a range of social dilemma games.

Date: 2023-06, Revised 2024-11
New Economics Papers: this item is included in nep-evo, nep-gth and nep-upt
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Published in J. Phys. Complex. 6 015010 2025

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2306.05971

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