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Unhappy is the land without symbols - Group symbols in infinitely repeated public good games

Tom Potoms () and Tom Truyts ()
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Tom Potoms: Department of Economics, University of Sussex
Tom Truyts: CEREC, Saint-Louis University

Working Paper Series from Department of Economics, University of Sussex Business School

Abstract: How are group symbols (e.g. a flag, Muslim veil, 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 efficiently segregating equilbrium, in which players only cooperate with others bearing the same symbol. Players bearing a scarcer symbol face a longer expected search time to find a cooperative partner upon partnership termination, and can therefore sustain higher levels of cooperation. We compare this equilibrium to other equilibria in terms of Pareto dominance and robustness to (some form of) bilateral renegotiation.

Keywords: Endogenous segregation; repeated games; random matching; public goods games (search for similar items in EconPapers)
JEL-codes: C73 D83 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-exp, nep-gth, nep-mic and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:sus:susewp:1720

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