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COMMUNICATION NETWORKS AND COOPERATION
Category: Economic Theory
Networks I Monday 26th August 2002, 09:30 - 11:00, Room: 4.6
Session Chair(s):
Andrea Galeotti, Tinbergen Institute-Erasmus University, NETHERLANDS
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Abstract:
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I study a network based mechanism of norm enforcement in a
community where agents play a repeated Prisoner's Dilemma with
changing partners. Each agent chooses a number of close friends to
whom he communicates his partners' actions. This enforces
cooperation since an agent's close friends punish a defecting
partner. In a world with noiseless communication, it is optimal
for each agent to have close contacts to all other network
members. Moreover, it is optimal to have a large network. If
communication is noisy a lower number of close contacts is
optimal. As the number of network members gets large norm
enforcement fails.
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