Markets and cooperation

Arbeitspapier

Why do money and markets crowd out co-operative relations? This paper characterises the effects of intertemporal preferences, money, and markets on players' ability to co-operate in material-payoff supergames. Players' aversion to intertemporal substitution facilitates co-operation by decreasing their evaluation of short-run gains from deviations and increasing that of losses from punishments. Goods' markets and money may hinder co-operation by allowing players to reallocate short-run gains from deviations in time, at some cost. Allowing for free intertemporal reallocation of payoffs, perfect financial markets always make co-operation harder. Financial markets' imperfections facilitate co-operation by opposing this effect.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 100.1999

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Exchange and Production Economies ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
• Subject: Co-operation ; repeated games ; Prisoner's dilemma ; commons ; reciprocal exchange ; implicit contracts ; collusion ; institutions ; Marktmechanismus ; Kooperation ; Spieltheorie ; Finanzmarkt ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Spagnolo, Giancarlo
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 1999

Further information

• Handle: http://hdl.handle.net/10419/155053
• Last update: 10.03.2025, 11:45 AM CET