Social norms and trust among strangers

Title
Social norms and trust among strangers
Author(s)
이용주Huan Xie[Huan Xie]
Keywords
COOPERATION; INFORMATION; GAMES
Issue Date
201211
Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
Citation
GAMES AND ECONOMIC BEHAVIOR, v.76, no.2, pp.548 - 555
Abstract
We study the development of a social norm of trust and reciprocity among a group of strangers via the "contagious strategy" as defined in Kandori (1992). Over an infinite horizon, the players anonymously and randomly meet each other and play a binary trust game. In order to provide the investors with proper incentives to follow the contagious strategy, there is a sufficient condition that requires that there exists an outside option for the investors. Moreover, the investors' payoff from the outside option must converge to the payoff from trust and reciprocity as the group size goes to infinity. We show that this sufficient condition is also a necessary condition to sustain any sequential equilibrium in which the trustees adopt the contagious strategy. Our results imply that a contagious equilibrium only supports trust if trust contributes almost nothing to the investors' payoffs. (C) 2012 Elsevier Inc. All rights reserved.
URI
http://hdl.handle.net/YU.REPOSITORY/26986http://dx.doi.org/10.1016/j.geb.2012.07.010
ISSN
0899-8256
Appears in Collections:
상경대학 > 경제금융학부 > Articles
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