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Unhappy is the land without symbols - Group symbols in infinitely repeated public good games

Author

Listed:
  • Tom Potoms

    (Department of Economics, University of Sussex)

  • Tom Truyts

    (CEREC, Saint-Louis University)

Abstract

How are group symbols (e.g. a flag, Muslim veil, clothing style) helpful in sustaining cooperation and social norms? We study the role of symbols in an infinitely repeated public goods game with random matching, endogenous partnership termination, limited information flows and endogenous symbol choice. We characterize an efficiently segregating equilbrium, in which players only cooperate with others bearing the same symbol. Players bearing a scarcer symbol face a longer expected search time to find a cooperative partner upon partnership termination, and can therefore sustain higher levels of cooperation. We compare this equilibrium to other equilibria in terms of Pareto dominance and robustness to (some form of) bilateral renegotiation.

Suggested Citation

  • Tom Potoms & Tom Truyts, 2020. "Unhappy is the land without symbols - Group symbols in infinitely repeated public good games," Working Paper Series 1720, Department of Economics, University of Sussex Business School.
    • Handle: RePEc:sus:susewp:1720
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    References listed on IDEAS

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    More about this item

    Keywords

    Endogenous segregation; repeated games; random matching; public goods games;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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