IDEAS home Printed from https://ideas.repec.org/a/gam/jgames/v6y2015i2p150-160d50656.html
   My bibliography  Save this article

How Moral Codes Evolve in a Trust Game

Author

Listed:
  • Jean Paul Rabanal

    (Economics Department, Ball State University, 2000 W. University Ave. Muncie, IN 47306, USA)

  • Daniel Friedman

    (Department of Economics, University of California Santa Cruz, 1156 High Street, Santa Cruz, CA 95064, USA)

Abstract

This paper analyzes the dynamic stability of moral codes in a two population trust game. Guided by a moral code, members of one population, the Trustors, are willing to punish members of the other population, the Trustees, who defect. Under replicator dynamics, adherence to the moral code has unstable oscillations around an interior Nash Equilibrium (NE), but under smoothed best response dynamics we obtain convergence to Quantal Response Equilibrium (QRE).

Suggested Citation

  • Jean Paul Rabanal & Daniel Friedman, 2015. "How Moral Codes Evolve in a Trust Game," Games, MDPI, vol. 6(2), pages 1-11, June.
    • Handle: RePEc:gam:jgames:v:6:y:2015:i:2:p:150-160:d:50656
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-4336/6/2/150/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-4336/6/2/150/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Schlag, Karl H., 1999. "Which one should I imitate?," Journal of Mathematical Economics, Elsevier, vol. 31(4), pages 493-522, May.
    2. Fudenberg, Drew & Levine, David, 1998. "Learning in games," European Economic Review, Elsevier, vol. 42(3-5), pages 631-639, May.
    3. Friedman, Daniel & Singh, Nirvikar, 2009. "Equilibrium vengeance," Games and Economic Behavior, Elsevier, vol. 66(2), pages 813-829, July.
    4. Gaunersdorfer Andrea & Hofbauer Josef, 1995. "Fictitious Play, Shapley Polygons, and the Replicator Equation," Games and Economic Behavior, Elsevier, vol. 11(2), pages 279-303, November.
    5. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July.
    6. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
    7. Brennan, Geoffrey & Pettit, Philip, 2005. "The Economy of Esteem: An Essay on Civil and Political Society," OUP Catalogue, Oxford University Press, number 9780199289813.
    8. Blume Lawrence E., 1993. "The Statistical Mechanics of Strategic Interaction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 387-424, July.
    9. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
    10. Pierre Courtois & Tarik Tazdaït, 2012. "Learning to trust strangers: an evolutionary perspective," Journal of Evolutionary Economics, Springer, vol. 22(2), pages 367-383, April.
    11. Brennan,Geoffrey & Hamlin,Alan, 2000. "Democratic Devices and Desires," Cambridge Books, Cambridge University Press, number 9780521639774, September.
    12. Gale, John & Binmore, Kenneth G. & Samuelson, Larry, 1995. "Learning to be imperfect: The ultimatum game," Games and Economic Behavior, Elsevier, vol. 8(1), pages 56-90.
    13. Daniel G. Arce, 2006. "Taking Corporate Culture Seriously: Group Effects in the Trust Game," Southern Economic Journal, John Wiley & Sons, vol. 73(1), pages 27-36, July.
    14. Theodore C. Bergstrom, 2002. "Evolution of Social Behavior: Individual and Group Selection," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 67-88, Spring.
    15. Jorgen W. Weibull, 1997. "Evolutionary Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731215, April.
    16. Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945, April.
    17. Daniel Friedman & Daniel McNeill, 2013. "Morals and Markets," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-137-33152-6, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ulrich Berger, 2016. "Learning to trust, learning to be trustworthy," Department of Economics Working Papers wuwp212, Vienna University of Economics and Business, Department of Economics.
    2. Fulei Shi & Chuansheng Wang & Cuiyou Yao, 2022. "A New Evolutionary Game Analysis for Industrial Pollution Management Considering the Central Government’s Punishment," Dynamic Games and Applications, Springer, vol. 12(2), pages 677-688, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hofbauer,J. & Sandholm,W.H., 2001. "Evolution and learning in games with randomly disturbed payoffs," Working papers 5, Wisconsin Madison - Social Systems.
    2. Battalio,R. & Samuelson,L. & Huyck,J. van, 1998. "Risk dominance, payoff dominance and probabilistic choice learning," Working papers 2, Wisconsin Madison - Social Systems.
    3. Lim, Wooyoung & Neary, Philip R., 2016. "An experimental investigation of stochastic adjustment dynamics," Games and Economic Behavior, Elsevier, vol. 100(C), pages 208-219.
    4. Edward Cartwright, 2002. "Learning to play approximate Nash equilibria in games with many players," Levine's Working Paper Archive 506439000000000070, David K. Levine.
    5. Thierry Vignolo, 2010. "Imitation and selective matching in reputational games," Journal of Evolutionary Economics, Springer, vol. 20(3), pages 395-412, June.
    6. Hofbauer,J. & Sandholm,W.H., 2001. "Evolution and learning in games with randomly disturbed payoffs," Working papers 5, Wisconsin Madison - Social Systems.
    7. Hart, Sergiu, 2002. "Evolutionary dynamics and backward induction," Games and Economic Behavior, Elsevier, vol. 41(2), pages 227-264, November.
    8. Boncinelli, Leonardo & Pin, Paolo, 2012. "Stochastic stability in best shot network games," Games and Economic Behavior, Elsevier, vol. 75(2), pages 538-554.
    9. Levine, David K. & Pesendorfer, Wolfgang, 2007. "The evolution of cooperation through imitation," Games and Economic Behavior, Elsevier, vol. 58(2), pages 293-315, February.
    10. Izquierdo, Luis R. & Izquierdo, Segismundo S. & Sandholm, William H., 2019. "An introduction to ABED: Agent-based simulation of evolutionary game dynamics," Games and Economic Behavior, Elsevier, vol. 118(C), pages 434-462.
    11. Demichelis, Stefano & Ritzberger, Klaus, 2003. "From evolutionary to strategic stability," Journal of Economic Theory, Elsevier, vol. 113(1), pages 51-75, November.
    12. Zibo Xu, 2013. "The instability of backward induction in evolutionary dynamics," Discussion Paper Series dp633, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    13. Ed Hopkins, 2002. "Two Competing Models of How People Learn in Games," Econometrica, Econometric Society, vol. 70(6), pages 2141-2166, November.
    14. Alós-Ferrer, Carlos & Weidenholzer, Simon, 2008. "Contagion and efficiency," Journal of Economic Theory, Elsevier, vol. 143(1), pages 251-274, November.
    15. Apesteguia, Jose & Huck, Steffen & Oechssler, Jorg, 2007. "Imitation--theory and experimental evidence," Journal of Economic Theory, Elsevier, vol. 136(1), pages 217-235, September.
    16. Ge Jiang & Simon Weidenholzer, 2017. "Local interactions under switching costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(3), pages 571-588, October.
    17. Ewerhart, Christian & Valkanova, Kremena, 2020. "Fictitious play in networks," Games and Economic Behavior, Elsevier, vol. 123(C), pages 182-206.
    18. repec:awi:wpaper:0419 is not listed on IDEAS
    19. Marden, Jason R. & Shamma, Jeff S., 2015. "Game Theory and Distributed Control****Supported AFOSR/MURI projects #FA9550-09-1-0538 and #FA9530-12-1-0359 and ONR projects #N00014-09-1-0751 and #N0014-12-1-0643," Handbook of Game Theory with Economic Applications,, Elsevier.
    20. Veller, Carl & Hayward, Laura K., 2016. "Finite-population evolution with rare mutations in asymmetric games," Journal of Economic Theory, Elsevier, vol. 162(C), pages 93-113.
    21. Ianni, Antonella & Corradi, Valentina, 2000. "Consensus, contagion and clustering in a space-time model of public opinion formation," Discussion Paper Series In Economics And Econometrics 0009, Economics Division, School of Social Sciences, University of Southampton.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jgames:v:6:y:2015:i:2:p:150-160:d:50656. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.