Cooperation and punishment mechanisms in uncertain and dynamic social networks

Edoardo Gallo, Yohanes E. Riyanto, Nilanjan Roy*, Tat-How Teh

*Corresponding author for this work

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

5 Citations (Scopus)
19 Downloads (CityUHK Scholars)

Abstract

This paper examines experimentally how reputational uncertainty and the rate of change of the social environment determine cooperation. Reputational uncertainty significantly decreases cooperation, while a fast-changing social environment only causes a second-order qualitative increase in cooperation. At the individual level, reputational uncertainty induces more leniency and forgiveness in imposing network punishment through the link proposal and removal processes, inhibiting the formation of cooperative clusters. However, this effect is significant only in the fast-changing environment and not in the slow-changing environment. A substitution pattern between network punishment and action punishment (retaliatory defection) explains this discrepancy across the two social environments.
Original languageEnglish
Pages (from-to)75-103
JournalGames and Economic Behavior
Volume134
Online published14 Apr 2022
DOIs
Publication statusPublished - Jul 2022

Research Keywords

  • Cooperation
  • Experiments
  • Prisoner's dilemma
  • Uncertainty
  • Repeated games
  • Networks

Publisher's Copyright Statement

  • COPYRIGHT TERMS OF DEPOSITED POSTPRINT FILE: © 2022. This manuscript version is made available under the CC-BY-NC-ND 4.0 license https://creativecommons.org/licenses/by-nc-nd/4.0/

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