Cooperation on Social Networks

At most places, and at most times, cooperation takes place in the absence of legal or contractual enforcement. What motivates players to cooperate? A growing literature in the social sciences emphasizes the importance of future interactions and social mechanisms by which defectors are punished both by their victims and third-parties. This perspective has, in recent years, influenced our understanding of contractual and lending relationships in developing economies, reputations in market platforms such as eBay, and even that of indirect reciprocity in theoretical biology. In this talk, I will describe how the nature and strength of these incentives varies with a social network, how a player may cooperate so as to preserve his reputation in a social network, and what guarantees that a victim of defection truthfully reveals to others that someone else has violated the social norm. We will see that dividing society into cliques and that a modicum of forgiveness can facilitate cooperation. We might see that a commonly made assumption made in much of the literature on cooperation—that victims always reveal when someone else has defected—may be less innocuous than it seems.