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We investigate the welfare effect of increasing competition in an anonymous two-sided matching market, where matched pairs play an infinitely repeated Prisoner's Dilemma. Higher matching efficiency is usually considered detrimental as it creates stronger incentives for defection. We point out,...
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Community enforcement is an important device for sustaining efficiency in some repeated games of cooperation. We … investigate cooperation when information about players' reputations spreads to their future partners through links in a social … network that connects them. We find that information supports cooperation by increasing trust between players, and obtain the …
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