Beyond Grim: Punishment Norms in the Theory of Cooperation

Gabriele Camera and Alessandro Gioffré
Authors registered in the RePEc Author Service: Alessandro Gioffré

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: The theory of repeated games asserts that, when past conduct is unobservable, patient individuals can attain the efficient outcome if cooperators suffer large losses to defectors, and react by forever defecting. This extreme "grim" punishment is, in fact, counterproductive when losses are small, as it prevents cooperation among patient players. Here we show how to resolve this non-existence problem. A class of moderate punishments exists, which support full cooperation independent of the size of losses to defectors. Our theory provides a rationale for the empirical observation that grim punishment is uncommon in laboratory studies of cooperation.

Keywords: prisoner’s dilemma; random matching; social norms. (search for similar items in EconPapers)
JEL-codes: C7 E4 E5 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2018
New Economics Papers: this item is included in nep-evo, nep-gth, nep-hpe, nep-mac and nep-mic
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Citations: View citations in EconPapers (1)

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