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Noisy Identity and Cooperation

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  • Astorne, Carmen
Abstract
When meeting a random stranger, it can be difficult to recognize who is like you (ingroup) and who is not (outgroup). I construct a model to explore how noise in detecting whether the other player is an ingroup or an outgroup impacts overall cooperation in strategic interactions. When the game is repeated, noisy identity can generate welfare gains that are not possible with perfect recognition by encouraging players to cooperate in all periods except the last one, regardless of how they identified the opponent. Importantly, noisy identity can sustain additional cooperation even when the potential cost of doing so is high. This result is largely driven by the level of noise in detecting who is an outgroup, whereas the role in recognizing an ingroup is less prominent.

Suggested Citation

  • Astorne, Carmen, 2023. "Noisy Identity and Cooperation," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 203-234.
    • Handle: RePEc:eee:jeborg:v:207:y:2023:i:c:p:203-234
    DOI: 10.1016/j.jebo.2023.01.007
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    More about this item

    Keywords

    Cooperation; Social identity; Noisy identity; Pure altruism; Prisoners’ Dilemma;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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