Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/217062
Authors: 
Deb, Joyee
González-Díaz, Julio
Year of Publication: 
2019
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 14 [Year:] 2019 [Issue:] 4 [Pages:] 1387-1433
Abstract: 
We study impersonal exchange, and ask how agents can behave honestly in anonymous transactions without contracts. We analyze repeated anonymous random matching games, where agents observe only their own transactions. Little is known about cooperation in this setting beyond the prisoner's dilemma. We show that cooperation can be sustained quite generally, using community enforcement and ``trust-building.'' The latter refers to an initial phase in which one community builds trust by not deviating despite a short-run incentive to cheat; the other community reciprocates trust by not punishing deviations during this phase. Trust-building is followed by cooperative play, sustained through community enforcement.
Subjects: 
Community enforcement
contagion
anonymous random matching
repeated games
JEL: 
C72
C73
D82
D83
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/4.0/
Document Type: 
Article

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