nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2007‒08‒08
one paper chosen by
Matthew Baker
City University of New York

  1. Equilibrium Vengeance By Friedman, Daniel; Singh, Nirvikar

  1. By: Friedman, Daniel; Singh, Nirvikar
    Abstract: The efficiency-enhancing role of the vengeance motive is illustrated in a simple social dilemma game in extensive form. Incorporating behavioral noise and observational noise in random interactions in large groups leads to seven continuous families of (short run) Perfect Bayesian equilibria (PBE) that involve both vengeful and non-vengeful types. A new long run evolutionary equilibrium concept, Evolutionary Perfect Bayesian Equilibrium (EPBE), shrinks the equilibrium set to two points. In one EPBE, only the non-vengeful type survives and there are no mutual gains. In the other EPBE, both types survive and reap mutual gains.
    Keywords: reciprocity; vengeance; evolutionary perfect Bayesian equilibrium; social dilemmas
    JEL: Z13 C73
    Date: 2007–06

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