Abstract
We investigate how cooperation is possible among self-interested individuals in an n-person prisoners' dilemma from the viewpoint of institutional arrangements. Assuming that individuals create by their free consent an institutional order to enforce an agreement of cooperation, we present a noncooperative game model in which individuals have negotiations for creating an enforcement agency and also for cooperation in advance of taking actual actions. The noncooperative solution of our institutional arrangement game shows that the probability of each individual participating in negotiations monotonically decreases and converges to zero as the number of individuals becomes larger and larger. Our noncooperative game model for institutional arrangements is applied to an environmental pollution problem and some numerical results are given.
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The research for this paper was started when I stayed at ZiF, University of Bielefeld, in 1987–88 to participate in the Research Project “Game Theory in the Behavioral Sciences.” Financial support and warm hospitality from ZiF is gratefully acknowledged. I am grateful to Hartmut Kliemt, Elinor Ostrom, James Rhodes and Koichi Suga for their very helpful suggestions and discussions. Of course, any remaining errors are of mine. Financial support by the Murata Science Foundation is gratefully acknowledged.
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Okada, A. The possibility of cooperation in an n-person prisoners' dilemma with institutional arrangements. Public Choice 77, 629–656 (1993). https://doi.org/10.1007/BF01047864
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DOI: https://doi.org/10.1007/BF01047864