Working Papers, Department of Economics, Lund University
Peter Engseld and Andreas Bergh
Choosing Opponents in Games of Cooperation and Coordination
Abstract: We analyze a cooperation game and a coordination game in
an evolutionary environment. Agents make noisy observations of opponent's
propensity to play dove, called reputation, and form preferences over
opponents based on their reputation. A game takes place when two agents
agree to play. Socially optimal cooperation is evolutionarily stable when
reputation perfectly reflects propensity to cooperate. With some reputation
noise, there will be at least some cooperation. Individual concern for
reputation results in a seemingly altruistic behavior. The degree of
cooperation is decreasing in anonymity. If reputation is noisy enough,
there is no cooperation in equilibrium. In the coordination game, the
efficient equilibrium is chosen and agents with better skills to observe
reputation earn more.
Keywords: Cooperation; Coordination; Conditioned Strategies; Prisoners Dilemma; Signaling; Reputation; Altruism; Evolutionary Equilibrium; (follow links to similar papers)
JEL-Codes: C70; C72; (follow links to similar papers)
25 pages, January 4, 2005, Revised November 29, 2005
This paper has been replaced by 2005:45 "Choosing Opponents in Prisoners’ Dilemma: An Evolutionary Analysis"
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