Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/184793
Authors: 
King, Maia
Year of Publication: 
2017
Series/Report no.: 
Working Paper 842
Abstract: 
Community enforcement is an important device for sustaining efficiency in some repeated games of cooperation. We investigate cooperation when information about players' reputations spreads to their future partners through links in a social network that connects them. We find that information supports cooperation by increasing trust between players, and obtain the 'radius of trust': an endogenous network listing the potentially cooperative relationships between pairs of players in a community. We identify two aspects of trust, which relate to the network structure in different ways. Where trust depends on the shadow of punishment, players are trusted if others can communicate about them. This is linked to 2-connectedness of the network and the length of cycles within it. Where trust relates to knowledge of a player's type, players are trusting if they are more likely to receive information through their network connections. Both aspects of trust are linked to new centrality measures that we construct from the probabilities of node-to-node information transmission in networks, for which we provide a novel and simple method of calculation.
Subjects: 
Cooperation
community enforcement
information transmission
networks
imperfect private monitoring
repeated games
reputation
trust
JEL: 
C73
D83
D85
L14
Z13
Document Type: 
Working Paper
Social Media Mentions:

Files in This Item:
File
Size
1.89 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.