caa a22 4500 605475504 CHVBK 20210128100352.0 cr unu---uuuuu 210128e20151101xx s 000 0 eng 10.1007/s00199-015-0909-4 doi (NATIONALLICENCE)springer-10.1007/s00199-015-0909-4 Efficiency may improve when defectors exist [Elektronische Daten] [Takako Fujiwara-Greve, Masahiro Okuno-Fujiwara, Nobue Suzuki] In repeated Prisoner's Dilemma, the C-trigger strategy played by all players is well known to achieve symmetric efficiency when players are sufficiently patient. By contrast, if players are free to quit a repeated Prisoner's Dilemma without information flow to new partners, cooperation from the outset of new partnerships cannot be a part of any symmetric equilibrium. Fujiwara-Greve and Okuno-Fujiwara (Rev Econ Stud 76:993-1021, 2009) showed that symmetric trust-building strategies can constitute an equilibrium for sufficiently long initial (D,D) (trust-building) periods. However, trust-building periods create social loss of payoffs, and there is a possibility that an asymmetric equilibrium with some players cooperating immediately, while others defect, may be more efficient. We show that there is a "fundamentally asymmetric” locally stable Nash equilibrium consisting of the most cooperative strategy (C-trigger with ending the partnership when betrayed) and the most noncooperative strategy, which plays D and ends the partnership immediately. When the deviation gain is relatively small, the fundamentally asymmetric equilibrium is neutrally stable against equilibrium entrants within trust-building strategies and is more efficient than any Nash equilibrium consisting of non-degenerate trust-building strategies. Our result indicates that behavioral diversity can be stable and beneficial for the society, even if players are free to escape from personalized punishments. Springer-Verlag Berlin Heidelberg, 2015 Efficiency nationallicence Diversity nationallicence Voluntary separation nationallicence Prisoner's Dilemma nationallicence Endogenous partnerships nationallicence Fujiwara-Greve Takako Department of Economics, Keio University, 2-15-45 Mita, 108-8345, Minatoku, Tokyo, Japan aut Okuno-Fujiwara Masahiro Department of Economics, Musashino University, 3-3-3 Ariake, Kotoku, 135-0063, Tokyo, Japan aut Suzuki Nobue Faculty of Economics, Komazawa University, 1-23-1 Komazawa, 154-8525, Setagayaku, Tokyo, Japan aut Economic Theory Springer Berlin Heidelberg 60/3(2015-11-01), 423-460 0938-2259 60:3<423 2015 60 199 https://doi.org/10.1007/s00199-015-0909-4 text/html Onlinezugriff via DOI BK010053 XK010053 XK010000 Metadata rights reserved Springer special CC-BY-NC licence nationallicence 1 research-article jats NATIONALLICENCE NATIONALLICENCE NL-springer NATIONALLICENCE 856 40 https://doi.org/10.1007/s00199-015-0909-4 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Fujiwara-Greve Takako Department of Economics, Keio University, 2-15-45 Mita, 108-8345, Minatoku, Tokyo, Japan aut NATIONALLICENCE 700 1- Okuno-Fujiwara Masahiro Department of Economics, Musashino University, 3-3-3 Ariake, Kotoku, 135-0063, Tokyo, Japan aut NATIONALLICENCE 700 1- Suzuki Nobue Faculty of Economics, Komazawa University, 1-23-1 Komazawa, 154-8525, Setagayaku, Tokyo, Japan aut NATIONALLICENCE 773 0- Economic Theory Springer Berlin Heidelberg 60/3(2015-11-01), 423-460 0938-2259 60:3<423 2015 60 199