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Formation and long-run stability of cooperative groups in a social dilemma situation

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  • Toshimasa Maruta
  • Akira Okada

Abstract

type="main" xml:lang="en"> We consider the formation and long-run stability of cooperative groups in a social dilemma situation where the pursuit of individual interests conflicts with the maximization of social welfare. The adaptive play model of Young ( ) is applied to a group formation game where voluntary participants negotiate to create an institution that enforces cooperation. For the class of group formation games with two types, the stochastically stable equilibrium can be characterized in terms of the Nash products of the associated hawk–dove games, which summarize the strategic interaction among the individuals in the game.

Suggested Citation

  • Toshimasa Maruta & Akira Okada, 2015. "Formation and long-run stability of cooperative groups in a social dilemma situation," International Journal of Economic Theory, The International Society for Economic Theory, vol. 11(1), pages 121-135, March.
    • Handle: RePEc:bla:ijethy:v:11:y:2015:i:1:p:121-135
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    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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