The emergence of reciprocally beneficial cooperation

Sergio Beraldo and Robert Sugden

ICER Working Papers from ICER - International Centre for Economic Research

Abstract: This paper offers a new and robust model of the emergence and persistence of cooperation. In the model, interactions are anonymous, the population is well-mixed, and the evolutionary process selects strategies according to material payoffs. The cooperation problem is modelled as a game similar to Prisoner’s Dilemma, but there is an outside option of nonparticipation and the payoff to mutual cooperation is stochastic; with positive probability, this payoff exceeds that from cheating against a cooperator. Under mild conditions, mutually beneficial cooperation occurs in equilibrium. This is possible because the non-participation option holds down the equilibrium frequency of cheating.

Keywords: Cooperation; voluntary participation; random payoffs. (search for similar items in EconPapers)
JEL-codes: C73 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2010-07
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-gth, nep-hpe and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The emergence of reciprocally beneficial cooperation (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:icr:wpicer:18-2010

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