Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/97254
Authors: 
Kets, Willemien
Feinberg, Yossi
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper, Center for Mathematical Studies in Economics and Management Science 1557
Abstract: 
We investigate the scope for cooperation within a community engaged in repeated reciprocal interactions. Players seek the help of others and approach them sequentially according to some fixed order, that is, a ranking profile. We study the ranking profiles that are most effective in sustaining cooperation in equilibrium, that is, profiles that support full cooperation in equilibrium under the largest set of parameters. These are the profiles that spread the costs of helping others equally among the members of the community. We show that, generically, these socially optimal ranking profiles correspond to Latin squares - profiles in which each player appears in a given position exactly once in other players' list. In addition, we study equilibria with bilateral enforcement in which only the victims punish non-cooperating deviators. We show that the Latin squares in which every two players rank each other at the same position can sustain cooperation for the widest range of parameters in this case.
Subjects: 
Cooperation
repeated games
ranking profiles
networks
Cooperation
repeated games
ranking profiles
networks
JEL: 
D85
C73
L14
Z13
C72
Document Type: 
Working Paper

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