On symbols and cooperation

Tom Potoms and Tom Truyts

No 549208, Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: How are group symbols (e.g., a flag, a Muslim veil, a clothing style) helpful in sustaining cooperation and social norms? We study the role of symbols in an infinitely repeated public goods game with random matching, endogenous partnership termination, limited information ‡flows and endogenous symbol choice. We characterize an efficient segregating equilibrium, in which players only cooperate with others bearing the same symbol. In this equilibrium, players bearing a scarcer symbol face a longer expected search time to find a cooperative partner upon partnership termination, and this sacrifice of outside options allows them to sustain higher levels of cooperation. We compare this equilibrium to other equilibria in terms of renegotiation proofness, and we discuss the relation this has to the evolution of intolerance.

Date: 2016-09
New Economics Papers: this item is included in nep-gth and nep-mic
Note: paper number DPS 16.18
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Published in Department of Economics. Discussion paper series,, pages 1-35

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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:549208

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