TY - JOUR
T1 - Voluntarily separable repeated Prisoner's Dilemma with reference letters
AU - Fujiwara-Greve, Takako
AU - Okuno-Fujiwara, Masahiro
AU - Suzuki, Nobue
N1 - Funding Information:
We are grateful to the Editor in Charge, Atsushi Kajii, Colin Rowat, Yasushi Tsuru, Nick Feltovich, Jack Stecher, Partha Gangopadhyay, Yosuke Yasuda, and Henrich Greve for useful comments. This work was supported by JSPS Grant-in-Aid for Scientific Research (C), No. 19530158.
PY - 2012/3
Y1 - 2012/3
N2 - We consider the voluntarily separable repeated Prisoner's Dilemma model in which players randomly meet and form pairs to repeatedly play Prisoner's Dilemma only by mutual agreement. While the literature has dealt with the case of no information flow across partnerships, we consider the case in which players can issue a "reference letter" to verify at least that the partnership entered the cooperation phase. We show that such reference letters can be voluntarily provided by the partners even at some cost, and that the sheer existence of a letter shortens the trust-building periods and thus improves social efficiency.
AB - We consider the voluntarily separable repeated Prisoner's Dilemma model in which players randomly meet and form pairs to repeatedly play Prisoner's Dilemma only by mutual agreement. While the literature has dealt with the case of no information flow across partnerships, we consider the case in which players can issue a "reference letter" to verify at least that the partnership entered the cooperation phase. We show that such reference letters can be voluntarily provided by the partners even at some cost, and that the sheer existence of a letter shortens the trust-building periods and thus improves social efficiency.
KW - Cooperation
KW - Information
KW - Prisoner's Dilemma
KW - Random matching
KW - Voluntary separation
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U2 - 10.1016/j.geb.2011.08.019
DO - 10.1016/j.geb.2011.08.019
M3 - Article
AN - SCOPUS:84856958567
SN - 0899-8256
VL - 74
SP - 504
EP - 516
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 2
ER -