A Folk Theorem Paper Revised
Published:
I just uploaded a substantially revised manuscript of
“On The Folk Theorem in Self-Sustained Communities”
co-authored with Takako Fujiwara-Greve at the SSRN. (You can download it for FREE 😉)
The questions we address in the paper are the following:
- Is it possible to sustain cooperative behaviors in a community if the repeated relationships themselves need to be self-sustained by its members?
- If so, to what extent and by what kind of mechanisms?
To answer them, we formulate a general framework in which players strategically choose in each period whether to repeat an N-person game or terminate it. We show that, even when the game duration is endogenous in this sense, the players can achieve non-myopic behaviors as much as possible (-> the folk theorem). By the way, one of our key mechanisms is based on the “expulsion room” (追い出し部屋) method used by some Japanese firms 👍
We hope our research would contribute to a foundation for the folk theorem and a better understanding of the sustainability of cooperations AND communities 😊