Cooperation among strangers with limited information about reputation

Today, nearly all organizations have to negotiate and cooperate with „strangers“, that means with trading partners (individuals or organizations) of which none or few informa-tion is available. One reason is the increasing trade and communication via internet in or-ganizations. But also in private transactions we often have to deal or to cooperate with un-known individuals, for example in the case of buying something on Ebay or similar online-portals. The amount of institutional intervention which is necessary to ensure efficient co-operation in markets and organizations, in circumstances where interactions take place among essentially strangers, depends critically on the amount of information informal reputation mechanisms need to transmit (Bolton et al., 2004).
One important factor to enforce cooperation in small groups or in information-tracking organizations is reputation. When you think for example of credit-agencies, the willingness to afford a loan increases with the amount of information and reputation of the customer – of course the information has to fit the existing terms. In contrast, the effectiveness of reputation in circumstances where persons are essentially strangers, knowing about one another only through word-of-mouth, is far less certain. The issue is important because word-of-mouth mechanisms are typically less costly than formal institutional interventions such as legal contracts.
The central question to be answered in the presented experiment of Bolton, G. E. et al. (2004) is what information is necessary about reputation to support cooperative effort among strangers. The experiment indicates that even without any reputation information there is an amount of cooperation that is, however, influenced by the cooperation costs. For high costs, providing information about a partner’s immediate past action increases coop-eration. Recursive information about the partners’ previous partners’ reputation further promotes cooperation, regardless of the cooperation costs.

Inhaltsverzeichnis (Table of Contents)

• The importance of information
• The image scoring game
• The design of the experiment
• The experiment
• The impact of cost
• The impact of information
• The impact of history
• Conclusions
• Variation of the experiment's design

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

The study aims to investigate the role of information in fostering cooperation among strangers, particularly in situations where individuals have limited information about one another's reputation. This experiment focuses on the impact of different levels of reputation information on cooperative behavior in a game setting.

• The importance of information in promoting cooperation among strangers
• The impact of reputation mechanisms in fostering cooperation
• The influence of information about past actions on cooperative behavior
• The role of indirect reciprocity in sustaining cooperation
• The effectiveness of different information levels in influencing cooperative decisions

Zusammenfassung der Kapitel (Chapter Summaries)

• The importance of information: This chapter introduces the concept of cooperation among strangers in the context of limited reputation information. It highlights the critical role of information in ensuring efficient cooperation and discusses the effectiveness of reputation mechanisms in different scenarios.
• The image scoring game: This chapter describes the experimental setup, which involves the image scoring game. It explains the mechanics of the game, including the roles of mover and receiver, the decision-making process, and the concept of indirect reciprocity.
• The design of the experiment: This chapter details the experimental design, outlining the factors manipulated (information level and cost of giving) and the different conditions used in the experiment. It explains the procedure, participant selection, and the anonymity of the interaction.

Schlüsselwörter (Keywords)

The study focuses on key concepts such as cooperation among strangers, reputation mechanisms, indirect reciprocity, information levels, image scoring game, experimental design, and cooperative behavior. The experiment provides insights into the influence of reputation information on decision-making and the effectiveness of different information levels in promoting cooperation.

Details

• College: Friedrich-Alexander University Erlangen-Nuremberg
• Grade: 1,7
• Author: Julia Mattausch (Author)
• Publication Year: 2007
• Pages: 9
• Catalog Number: V88495
• ISBN (eBook): 9783638024846
• Language: English
• Tags: Cooperation