Ignacio Monzon (CCA), Andrea Gallice (CCA)

“Cooperation in Social Dilemmas through Position Uncertainty”

Abstract

In a social dilemma, individual incentives and collective interests are at odds. We propose a simple mechanism to sustain full cooperation in one-shot social dilemmas among a finite number of agents. Players sequentially decide whether to contribute to a public good. They observe the actions of some of their immediate predecessors but they do not know their position in the sequence. They choose to contribute to the public good in order to induce others to do so. We show that this mechanism can sustain cooperation in other social dilemmas, like the prisoners’ dilemma.