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The economics analysis of a Q-learning model of cooperation with punishment and risk taking preferences

Author

Listed:
  • Nazaria Solferino

    (University of Rome “Tor Vergata”)

  • Viviana Solferino

    (University of Calabria)

  • Serena F. Taurino

    (University of Rome “Tor Vergata”)

Abstract

The aim of this paper is to better understand how cooperation mechanisms work in the context of a Q-learning model. We apply a learning reinforcement model to analyse the conditions needed to have a stable cooperative equilibrium when people take part in a common project and could take advantages of free-riding. Our results show that a stable equilibrium can be reached thank to mechanisms of punishment, but the final result strongly depends on the risk-taking individuals’ preferences. In particular, we find that the penalties will be effective only with people having high exploration rates,namely with people able to adapt their strategies and learn to cooperate. Otherwise, it is possible to have an unstable equilibrium with cooperation until individuals have a very high intrinsic motivation to cooperate, whatever the others do.

Suggested Citation

  • Nazaria Solferino & Viviana Solferino & Serena F. Taurino, 2018. "The economics analysis of a Q-learning model of cooperation with punishment and risk taking preferences," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 13(3), pages 601-613, October.
    • Handle: RePEc:spr:jeicoo:v:13:y:2018:i:3:d:10.1007_s11403-017-0195-2
    DOI: 10.1007/s11403-017-0195-2
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    References listed on IDEAS

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    More about this item

    Keywords

    Cooperation; Punishment; Q-learning models; Risk preferences;
    All these keywords.

    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
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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