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Communication and cooperation in Prisoner's Dilemma games

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  • Bahel, Eric
  • Ball, Sheryl
  • Sarangi, Sudipta

Abstract

We consider a Prisoner's Dilemma model with a pre-play communication stage. Players get a disutility from deceiving others after sending a message of conditional cooperation. Each player's realized lying aversion cost is private information. We prove existence and characterize the (unique) symmetric perfect Bayesian equilibrium that maximizes cooperation. In this distinguished equilibrium, the frequency of cooperation decreases as material gains from lying (or losses from being deceived) increase. We introduce an iterated procedure allowing to characterize the set of rationalizable strategies. We find that cooperation may decrease as a population starts to value honesty more. We extend the model to account for the possibility of a benefit obtained when lying or the effect of the audience size.

Suggested Citation

  • Bahel, Eric & Ball, Sheryl & Sarangi, Sudipta, 2022. "Communication and cooperation in Prisoner's Dilemma games," Games and Economic Behavior, Elsevier, vol. 133(C), pages 126-137.
    • Handle: RePEc:eee:gamebe:v:133:y:2022:i:c:p:126-137
    DOI: 10.1016/j.geb.2022.02.008
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    Cited by:

    1. Li, Dandan & Zhou, Kai & Sun, Mei & Han, Dun, 2023. "Investigating the effectiveness of individuals’ historical memory for the evolution of the prisoner’s dilemma game," Chaos, Solitons & Fractals, Elsevier, vol. 170(C).

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    More about this item

    Keywords

    Cooperation; Prisoner's Dilemma; Lie aversion; Perfect Bayesian equilibrium;
    All these keywords.

    JEL classification:

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

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