Ostracism and Forgiveness
S. Nageeb Ali, David A. Miller
American Economic Review · 2016 · Volume 106 · Issue 8
Abstract
Many communities rely upon ostracism to enforce cooperation: if an individual shirks in one relationship, her innocent neighbors share information about her guilt in order to shun her, while continuing to cooperate among themselves. However, a strategic victim may herself prefer to shirk, rather than report her victimization truthfully. If guilty players are to be permanently ostracized, then such deviations are so tempting that cooperation in any relationship is bounded by what the partners could obtain through bilateral enforcement. Ostracism can improve upon bilateral enforcement if tempered by forgiveness, through which guilty players are eventually readmitted to cooperative society.
Keywords
Stochastic and Dynamic Games, Evolutionary Games, Repeated Games, Search, Learning, Information and Knowledge, Communication, Belief, Unawareness, Network Formation and Analysis: Theory, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements, Economic Sociology, Economic Anthropology, Language, Social and Economic Stratification
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