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Consider a large market with asymmetric information, in which sellers choose whether to cooperate or deviate and ?cheat?their buyers, and buyers decide whether to re-purchase from diĀ¤erent sellers. We model active trade relationships as links in a buyer-seller network and suggest a framework...
Persistent link: https://www.econbiz.de/10008692033
Entrusting the power to punish to a central authority is a hallmark of civilization. We study a collective action dilemma in which self-interest should produce a sub-optimal outcome absent sanctions for non-cooperation. We then test experimentally whether subjects make the theoretically optimal...
Persistent link: https://www.econbiz.de/10008800357
In this paper, we argue that an important function fulfilled by intermediaries is to facilitate trust by enabling social pressure towards the enforcement of informal agreements. To that end, we develop a new model that uses network theory to show that intermediaries who have exclusivity over a...
Persistent link: https://www.econbiz.de/10011196582
Previous research has shown that opportunities for two-sided partner choice in finitely repeated social dilemma games can promote cooperation through a combination of sorting and opportunistic signaling, with late period defections by selfish players causing an end-game decline. How such...
Persistent link: https://www.econbiz.de/10011196594