IDEAS home Printed from https://ideas.repec.org/p/cam/camdae/0612.html
   My bibliography  Save this paper

Cooperation in the Repeated Prisoner’s Dilemma with Local Interaction

Author

Listed:
  • Xue, J.

Abstract

This paper studies the repeated Prisoner’s Dilemma in a local interaction setup. We construct a sequential equilibrium in pure strategies that sustains cooperation for suffciently patient players. The strategy is embedded in an explicitly defined expectation system, which is a more compact way than machines to describe strategies in the local interaction setup, although essentially the expectation system can also be viewed as a finite state automaton. The belief system is derived by perturbing the strategy appropriately and following the principle that parsimonious explanations receive all the weight. The equilibrium has the property that after any global history, full cooperation will be restored after a finite number of periods.

Suggested Citation

  • Xue, J., 2006. "Cooperation in the Repeated Prisoner’s Dilemma with Local Interaction," Cambridge Working Papers in Economics 0612, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:0612
    Note: ET
    as

    Download full text from publisher

    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe0612.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Glenn Ellison, 1994. "Cooperation in the Prisoner's Dilemma with Anonymous Random Matching," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 567-588.
    2. Bergstrom, Theodore C & Stark, Oded, 1993. "How Altruism Can Prevail in an Evolutionary Environment," American Economic Review, American Economic Association, vol. 83(2), pages 149-155, May.
    3. Eshel, I. & Samuelson, L. & Shaked, A., 1996. "Altruists, Egoists and Hooligans in a Local Interaction Model," Working papers 9612r, Wisconsin Madison - Social Systems.
    4. V. Bhaskar, 1998. "Informational Constraints and the Overlapping Generations Model: Folk and Anti-Folk Theorems," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(1), pages 135-149.
    5. Drew Fudenberg & Eric Maskin, 2008. "The Folk Theorem In Repeated Games With Discounting Or With Incomplete Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 11, pages 209-230, World Scientific Publishing Co. Pte. Ltd..
    6. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 63-80.
    7. Ilan Eshel & Larry Samuelson & Avner Shaked, "undated". "Altruists Egoists and Hooligans in a Local Interaction Model," ELSE working papers 005, ESRC Centre on Economics Learning and Social Evolution.
    8. Eshel, Ilan & Samuelson, Larry & Shaked, Avner, 1998. "Altruists, Egoists, and Hooligans in a Local Interaction Model," American Economic Review, American Economic Association, vol. 88(1), pages 157-179, March.
    Full references (including those not matched with items on IDEAS)

    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. Levine, David K. & Pesendorfer, Wolfgang, 2007. "The evolution of cooperation through imitation," Games and Economic Behavior, Elsevier, vol. 58(2), pages 293-315, February.
    2. Bose Gautam, 2010. "The Fragmentation of Reputation," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-36, April.
    3. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2008. "A “Super” Folk Theorem for dynastic repeated games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 37(3), pages 357-394, December.
    4. John Conley & Myrna H. Wooders & Ali Toossi, 2001. "Evolution & Voting: How Nature Makes us Public Spirited," Economics Bulletin, AccessEcon, vol. 28(24), pages 1.
    5. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2007. "Social Memory and Evidence from the Past," Working Papers gueconwpa~07-07-01, Georgetown University, Department of Economics.
    6. Munshi, Kaivan & Myaux, Jacques, 2006. "Social norms and the fertility transition," Journal of Development Economics, Elsevier, vol. 80(1), pages 1-38, June.
    7. Yanlong Zhang & Wolfram Elsner, 2020. "Social leverage, a core mechanism of cooperation. Locality, assortment, and network evolution," Journal of Evolutionary Economics, Springer, vol. 30(3), pages 867-889, July.
    8. Alexander Matros, 2006. "Altruistic Versus Rational Behavior in a Public Good Game," Working Paper 309, Department of Economics, University of Pittsburgh, revised Sep 2008.
    9. Jindani, Sam, 2020. "Community enforcement using modal actions," Journal of Economic Theory, Elsevier, vol. 185(C).
    10. Ely, Jeffrey C. & Valimaki, Juuso, 2002. "A Robust Folk Theorem for the Prisoner's Dilemma," Journal of Economic Theory, Elsevier, vol. 102(1), pages 84-105, January.
    11. Antonio E. Bernardo & Ivo Welch, 2001. "On the Evolution of Overconfidence and Entrepreneurs," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(3), pages 301-330, September.
    12. Stanley Reiter, 1999. "Coordination of Economic Activity: An Example," Discussion Papers 1263, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    13. Herings, P. Jean-Jacques & Peeters, Ronald & Tenev, Anastas P. & Thuijsman, Frank, 2021. "Naïve imitation and partial cooperation in a local public goods model," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 162-185.
    14. Ekkehart Schlicht, 2004. "Social Evolution, Corporate Culture, and Exploitation," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(2), pages 232-242, June.
    15. Bilancini, Ennio & Boncinelli, Leonardo, 2009. "The co-evolution of cooperation and defection under local interaction and endogenous network formation," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 186-195, May.
    16. Camera, Gabriele & Gioffré, Alessandro, 2017. "Asymmetric social norms," Economics Letters, Elsevier, vol. 152(C), pages 27-30.
    17. Armin Falk & Urs Fischbacher & Simon G�chter, "undated". "Living in Two Neighborhoods - Social Interactions in the Lab," IEW - Working Papers 150, Institute for Empirical Research in Economics - University of Zurich.
    18. Guilherme Carmona, 2002. "Monetary trading: an optimal exchange system," Nova SBE Working Paper Series wp420, Universidade Nova de Lisboa, Nova School of Business and Economics.
    19. Nathan Berg & Jeong-Yoo Kim & Kyu Min Lee, 2021. "Why is parochialism prevalent?: an evolutionary approach," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 16(4), pages 769-796, October.
    20. von Wangenheim, Georg & Müller, Stephan, 2014. "Evolution of cooperation in social dilemmas: signaling internalized norms," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100340, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    Prisoner’s dilemma; local interaction; expectation;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:cam:camdae:0612. 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: Jake Dyer (email available below). General contact details of provider: https://www.econ.cam.ac.uk/ .

    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.