Fostering cooperation through the enhancement of own vulnerability

The fact that gossip can be inaccurate, intentionally or otherwise, has led to questions over its ability to build cooperation in large societies. We explore the impact of gossip accuracy on trust and trustworthiness in a population playing decentralized, two-player trust games. We observed non-trivial levels of spontaneous inaccuracy in gossip, and there was evidence that this was largely due to gossipers' desire to punish untrustworthy players. Although this endogenous inaccuracy did not adversely a↵ect levels of trust and trustworthiness, introducing high levels of exogenous inaccuracy did. Importantly though, we observed greater trust and trustworthiness when highly inaccurate gossip was present than when communication was impossible. This suggests that even inaccurate gossip induces a degree of reputational concern in gossip targets and some willingness among gossip recipients to discriminate between partners on the basis of the gossip they received. Thus, gossip need not be perfectly accurate to e↵ectively induce cooperation.

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Reconciling Relational Contracting and Hold-up: A Model of Repeated Negotiations

Goldlücke

Kranz

2022

Journal of the European Economic Association

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Game-theoretic analysis of relational contracts typically studies Pareto optimal equilibria. We illustrate how this equilibrium selection rules out very intuitive hold-up concerns in stochastic games with long-term decisions. The key problem is that Pareto optimal equilibria, even if satisfying renegotiation-proofness, do not reflect plausible concerns of how today’s actions affect future bargaining positions within the relationship. We propose and characterize an alternative equilibrium selection based on the notion that continuation play is repeatedly negotiated in a relationship. We illustrate with several examples how the concept naturally combines relational contracting and hold-up concerns.

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Fostering cooperation through the enhancement of own vulnerability

Cited by 7 publications

References 46 publications

Using rewards reasonably: The effects of stratified-rewards in public goods game

Using rewards reasonably: The effects of stratified-rewards in public goods game

Will any gossip do? Gossip does not need to be perfectly accurate to promote trust

Reconciling Relational Contracting and Hold-up: A Model of Repeated Negotiations

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