Article ID Journal Published Year Pages File Type
5071471 Games and Economic Behavior 2016 29 Pages PDF
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 first-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.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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