Honesty, Stigma, and Cooperation in an Overlapping-Generations Game
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arXiv
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| Autori principali: | , |
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| Natura: | Preprint |
| Pubblicazione: |
2025
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| _version_ | 1866917072621010944 |
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| author | Li, David Lukyanov, Georgy |
| author_facet | Li, David Lukyanov, Georgy |
| contents | We study an overlapping-generations model of community enforcement where each agent interacts once as young and once as old across two groups. After each match a minimal, directed record assigns a public "stigma" only when a player defects against a cooperator; the label is observed solely by the defector's next partner. A known fraction of agents are honest (cooperate unless the opponent is stigmatized); the rest are strategic and privately heterogeneous in the cost of being exploited. We characterize symmetric cutoff equilibria for strategic young players. When the one-shot gain from defection is moderate, the equilibrium exists and is unique; when it is large, multiple equilibria arise. In that region, increasing the share of honest types can reduce cooperation by shifting selection toward a lower cutoff - an "honesty backfires" effect. We further show that probabilistic record-clearing weakly lowers cutoffs and never expands the cooperation region. The results yield design lessons for reputation systems: target clear opportunism and avoid mechanically forgiving records, as persistence of credible negative signals disciplines behavior across cohorts. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2509_04748 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Honesty, Stigma, and Cooperation in an Overlapping-Generations Game Li, David Lukyanov, Georgy Theoretical Economics We study an overlapping-generations model of community enforcement where each agent interacts once as young and once as old across two groups. After each match a minimal, directed record assigns a public "stigma" only when a player defects against a cooperator; the label is observed solely by the defector's next partner. A known fraction of agents are honest (cooperate unless the opponent is stigmatized); the rest are strategic and privately heterogeneous in the cost of being exploited. We characterize symmetric cutoff equilibria for strategic young players. When the one-shot gain from defection is moderate, the equilibrium exists and is unique; when it is large, multiple equilibria arise. In that region, increasing the share of honest types can reduce cooperation by shifting selection toward a lower cutoff - an "honesty backfires" effect. We further show that probabilistic record-clearing weakly lowers cutoffs and never expands the cooperation region. The results yield design lessons for reputation systems: target clear opportunism and avoid mechanically forgiving records, as persistence of credible negative signals disciplines behavior across cohorts. |
| title | Honesty, Stigma, and Cooperation in an Overlapping-Generations Game |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2509.04748 |