Jehiel, P;
Samuelson, L;
(2023)
The analogical foundations of cooperation.
Journal of Economic Theory
, 208
, Article 105609. 10.1016/j.jet.2023.105609.
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Abstract
We offer an approach to cooperation in repeated games of private monitoring in which players construct models of their opponents' behavior by observing the frequencies of play in a record of past plays of the game in which actions but not signals are recorded. Players construct models of their opponent's behavior by grouping the histories in the record into a relatively small number of analogy classes for which they estimate probabilities of cooperation. The incomplete record and the limited number of analogy classes lead to misspecified models that provide the incentives to cooperate. We provide conditions for the existence of equilibria supporting cooperation and equilibria supporting high payoffs for some nontrivial analogy partitions.
| Type: | Article |
|---|---|
| Title: | The analogical foundations of cooperation |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1016/j.jet.2023.105609 |
| Publisher version: | https://doi.org/10.1016/j.jet.2023.105609 |
| Language: | English |
| Additional information: | This is an open access article under the CC BY-NC-ND license (http://creativecommons .org /licenses /by -nc -nd /4 .0/). |
| Keywords: | Analogical reasoning, Cooperation, Prisoners' dilemma, Repeated game, Private monitoring |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10165073 |
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