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On the stability of cooperation under indirect reciprocity with first-order information

Berger, Ulrich and Grüne, Ansgar (2016) On the stability of cooperation under indirect reciprocity with first-order information. Games and Economic Behavior, 98. pp. 19-33. ISSN 0899-8256

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Abstract

Indirect reciprocity describes a class of reputation-based mechanisms which may explain the prevalence of cooperation in large groups where partners meet only once. The first model for which this has been demonstrated was the image scoring mechanism. But analytical work on the simplest possible case, the binary scoring model, has shown that even small errors in implementation destabilize any cooperative regime. It has thus been claimed that for indirect reciprocity to stabilize cooperation, assessments of reputation must be based on higher-order information. Is indirect reciprocity relying on frst-order information doomed to fail? We use a simple analytical model of image scoring to show that this need not be the case. Indeed, in the general image scoring model the introduction of implementation errors has just the opposite effect as in the binary scoring model: it may stabilize instead of destabilize cooperation.

Item Type: Article
Additional Information: Financial support by the Jubiläumsstiftung der Wirtschaftsuniversität Wien is gratefully acknowledged. To see the final version of this paper please visit the publisher's website. Access to the published version requires a subscription.
Keywords: cooperation; prisoner's dilemma; donation game; indirect reciprocity; image scoring; first-order assessment; first-order information; evolutionary stability
Classification Codes: JEL C72, D83
Divisions: Departments > Volkswirtschaft > Analytische Volkswirtschaftslehre
Version of the Document: Accepted for Publication
Depositing User: Ulrich Berger
Date Deposited: 12 Jun 2017 17:41
Last Modified: 12 Jun 2017 17:43
Related URLs:
FIDES Link: https://bach.wu.ac.at/d/research/results/77201/
URI: http://epub.wu.ac.at/id/eprint/5067

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