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Public Good Games with Incentives: The Role of Reputation

In: Games, Groups, and the Global Good

Author

Listed:
  • Hannelore De Silva

    (WU Vienna, Department Finance and Accounting)

  • Karl Sigmund

Abstract

Both the Trust Game and the Ultimatum Game reduce, in their most simplified versions, to a Public Good Game with an added incentive: namely a reward in the first case, and a sanction in the other. In this paper, the evolutionary game dynamics of these games is analyzed by means of the replicator equation. Positive and negative incentives have very different but complementary effects. We investigate the role of reputation, and show how occasional failures to contribute can lead to stabilizing cooperation.

Suggested Citation

  • Hannelore De Silva & Karl Sigmund, 2009. "Public Good Games with Incentives: The Role of Reputation," Springer Series in Game Theory, in: Simon A. Levin (ed.), Games, Groups, and the Global Good, chapter 5, pages 85-103, Springer.
    • Handle: RePEc:spr:spschp:978-3-540-85436-4_5
    DOI: 10.1007/978-3-540-85436-4_5
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    Citations

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    Cited by:

    1. Karl Sigmund & Christoph Hauert & Arne Traulsen & Hannelore Silva, 2011. "Social Control and the Social Contract: The Emergence of Sanctioning Systems for Collective Action," Dynamic Games and Applications, Springer, vol. 1(1), pages 149-171, March.
    2. 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.
    3. Amado, André & Huang, Weini & Campos, Paulo R.A. & Ferreira, Fernando Fagundes, 2015. "Learning process in public goods games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 430(C), pages 21-31.

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