Limited memory can be beneficial for the evolution of cooperation

Friederike Mengel, Gergely Horvath and Jaromír Kovářík

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: We study a dynamic process where agents in a network interact in a Prisoner’s Dilemma. The network not only mediates interactions, but also information: agents learn from their own experience and that of their neighbors in the network about the past behavior of others. Each agent can only memorize the last h periods. Evolution selects among three preference types: altruists, defectors and conditional cooperators. We show - relying on simulation techniques - that the probability of reaching a cooperative state does not relate monotonically to the size of memory h. In fact it turns out to be optimal from a population viewpoint that there is a finite bound on agents’ memory capacities. We also show that it is the interplay of local interactions, direct and indirect reputation and memory constraints that is crucial for the emergence of cooperation. Taken by itself, none of these mechanisms is sufficient to yield cooperation.

Keywords: evolution; reputation; bounded memory; cooperation. (search for similar items in EconPapers)
JEL-codes: C70 C72 C73 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2010-07
New Economics Papers: this item is included in nep-cbe, nep-cmp, nep-evo, nep-gth and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published by Ivie

Downloads: (external link)
http://www.ivie.es/downloads/docs/wpasad/wpasad-2010-25.pdf Fisrt version / Primera version, 2010 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2010-25

Access Statistics for this paper

More papers in Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) Contact information at EDIRC.
Bibliographic data for series maintained by Departamento de Edición ().