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Rational Cooperation In One-Shot Simultaneous Pd-Situations

Ronald Asher Heiner and Dieter Schmidtchen

No 95-03, CSLE Discussion Paper Series from Saarland University, CSLE - Center for the Study of Law and Economics

Abstract: The paper shows that being able to forecast another player's actual cooperation better than pure chance can change players' strategic incentives in a one-shot simultaneous PD-situation. In particular, it is shown that if both players have such ability (to forecast each others' actual choices better than pure chance), then "conditionally cooperative" Nash equilibria may exist in addition to the "always defect" equilibrium. By "conditionally cooperative" we mean that players do not cooperate because of a behavioral "disposition" to act cooperatively, but cooperate rather selectively contingent on their forecasting of the opponent's cooperation (cooperate if and only if each other is forecasted to cooperate).

Keywords: prisoner's dilemma; reliability condition; forecasting ability; trust (search for similar items in EconPapers)
JEL-codes: C72 C70 (search for similar items in EconPapers)
Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:csledp:9503

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