Working Papers, Department of Economics, Lund University
The Problem of Cooperation and Reputation Based Choice
() and Peter Engseld
Abstract: The standard method when analyzing the problem of
cooperation using evolutionary game theory is to assume that people are
randomly matched against each other in repeated games. In this paper we
discuss the implications of allowing agents to have preferences over
possible opponents. We model reputation as a noisy observation of actual
propensity to cooperate and illustrate how reputation based choice of
opponents can explain both the emergence and deterioration of cooperation.
We show that empirical and experimental evidence of cooperation is
consistent with our hypothesis that people behave so as to minimize the
risk of damaging their reputation as nice, cooperative persons.
Keywords: Cooperation; Prisoners Dilemma; Signaling; Reputation; Altruism; Institutions; (follow links to similar papers)
JEL-Codes: C70; C90; (follow links to similar papers)
20 pages, April 28, 2005, Revised May 4, 2006
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