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Will you cooperate in case the payoff can be guaranteed?

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  • Zhang, Xiaoyang
  • Chen, Tong
  • Chen, Qiao
  • Li, Xueya

Abstract

To reduce the risk of cooperators being hitchhiked so as to promote cooperation, this paper proposes a kind of insurance-like incentive mechanism, which integrates the advantages of reward and insurance. This paper uses an agent-based model to simulate the feasibility of the insurance-like incentive. The changes in the fraction of cooperators and net profit influenced by different extra-charges and incentive rates are analyzed. And evolutionary results show that with the introduction of such an insurance-like incentive mechanism, cooperators ultimately dominate the situation, and the value of the net profit of organizer becomes higher than without this mechanism. The lower the extra-charge, or the higher the incentive rate, the easier the cooperation will be. Moreover, the proper match between extra-charge and incentive rate can help organizers achieve the optimal effect of encouraging collective donation. Through this mechanism, the incentive costs can be saved noticeably, and there are no second-order exploiters. The risk of cooperators of being exploited can be reduced by paying the extra-charges. And cooperators may continue to increase their contributions even if there are no defectors in the system.

Suggested Citation

  • Zhang, Xiaoyang & Chen, Tong & Chen, Qiao & Li, Xueya, 2020. "Will you cooperate in case the payoff can be guaranteed?," Chaos, Solitons & Fractals, Elsevier, vol. 130(C).
    • Handle: RePEc:eee:chsofr:v:130:y:2020:i:c:s0960077919303649
    DOI: 10.1016/j.chaos.2019.109423
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    1. Zhang, Xiaoyang & Chen, Tong & Chen, Qiao & Li, Xueya, 2020. "Increasing pool funds in public goods: The effects of deposit-based delayed rewards," Chaos, Solitons & Fractals, Elsevier, vol. 140(C).

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