Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155053
Authors: 
Spagnolo, Giancarlo
Year of Publication: 
1999
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 100.1999
Abstract: 
Why do money and markets crowd out co-operative relations? This paper characterises the effects of intertemporal preferences, money, and markets on players' ability to co-operate in material-payoff supergames. Players' aversion to intertemporal substitution facilitates co-operation by decreasing their evaluation of short-run gains from deviations and increasing that of losses from punishments. Goods' markets and money may hinder co-operation by allowing players to reallocate short-run gains from deviations in time, at some cost. Allowing for free intertemporal reallocation of payoffs, perfect financial markets always make co-operation harder. Financial markets' imperfections facilitate co-operation by opposing this effect.
Subjects: 
Co-operation
repeated games
Prisoner's dilemma
commons
reciprocal exchange
implicit contracts
collusion
institutions
JEL: 
C72
D51
O17
Document Type: 
Working Paper

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