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Social pressure, uncertainty, and cooperation

Author

Listed:
  • Steffen Huck
  • Dorothea Kübler

Abstract

We analyse the role of uncertainty in a sequential game where players have to decide whether to contribute to a public project or not. A player's payoff may depend on his belief about the other player's action which allows us to model social pressure. Using the theory of psychological games, we show that the players' propensity to choose an individually costly action such as cooperation in a public project may increase if there is some uncertainty about who has cooperated before. A central agency, e.g. the government, can induce incomplete information by using a randomization policy, thus crowding in private contributions. Copyright Springer-Verlag Berlin Heidelberg 2000

Suggested Citation

  • Steffen Huck & Dorothea Kübler, 2000. "Social pressure, uncertainty, and cooperation," Economics of Governance, Springer, vol. 1(3), pages 199-212, December.
    • Handle: RePEc:spr:ecogov:v:1:y:2000:i:3:p:199-212
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    Citations

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    Cited by:

    1. Nadia Oliva & Andrea Pacella, 2016. "Does Firms¡¯ Social Responsibility Counteract Some Critical Effects of Labor Market Flexibility?," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 6(1), pages 109-120, March.
    2. Battigalli, Pierpaolo & Dufwenberg, Martin, 2009. "Dynamic psychological games," Journal of Economic Theory, Elsevier, vol. 144(1), pages 1-35, January.
    3. Jagau, Stephan & Perea, Andrés, 2022. "Common belief in rationality in psychological games," Journal of Mathematical Economics, Elsevier, vol. 100(C).

    More about this item

    Keywords

    Key words: social pressure; psychological games; cooperation; JEL classification: C72; H41;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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