Second thoughts of social dilemma in mechanism design

Tatsuyoshi Saijo ()

No SDES-2019-6, Working Papers from Kochi University of Technology, School of Economics and Management

Abstract: This paper shows that second thoughts are not an innocent device in our daily life, but is human wisdom that plays an important role in resolving problems such as social dilemmas. We design a simple mechanism to achieve Pareto efficiency in social dilemmas, and then compare the performance of this mechanism with and without second thoughts. First, second thoughts change the payoff structure of the game in favor of cooperation. Second, this mechanism is robust even when players deviate from a payoff maximizing behavior.

Keywords: second thoughts; subgame perfection; social dilemma; cooperation; mechanism design (search for similar items in EconPapers)
JEL-codes: C72 C92 D74 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2019-06, Revised 2019-06
New Economics Papers: this item is included in nep-cdm, nep-des, nep-exp and nep-gth
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Published in SDE Series, June 2019, pages 1-18

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http://www.souken.kochi-tech.ac.jp/seido/wp/SDES-2019-6.pdf First version, 2019 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kch:wpaper:sdes-2019-6

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