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<p>This paper studies how the cost of cooperation affects the effectiveness of community enforcement in a society of strangers, as in Kandori (Rev Econ Stud 59:63–80, 1992) and Ellison (Rev Econ Stud 61:567–588, 1994). We identify a critical threshold for the cost of cooperation, beyond which community punishment becomes a credible sanction to defectors, regardless of the population size and discount factor. Furthermore, we demonstrate that for any population size and discount factor, there exists a target cost of cooperation that makes community enforcement effective in supporting cooperation. This target cost can be used as a coordination device to sustain cooperation as an equilibrium outcome when the cost of cooperation is endogenous.</p>

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Community enforcement and the cost of cooperation

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2025年5月13日

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  • Alessandro Gioffré,
  • Alessandro Tampieri

摘要

This paper studies how the cost of cooperation affects the effectiveness of community enforcement in a society of strangers, as in Kandori (Rev Econ Stud 59:63–80, 1992) and Ellison (Rev Econ Stud 61:567–588, 1994). We identify a critical threshold for the cost of cooperation, beyond which community punishment becomes a credible sanction to defectors, regardless of the population size and discount factor. Furthermore, we demonstrate that for any population size and discount factor, there exists a target cost of cooperation that makes community enforcement effective in supporting cooperation. This target cost can be used as a coordination device to sustain cooperation as an equilibrium outcome when the cost of cooperation is endogenous.