Diverse Behavior Patterns in a Symmetric Society with Voluntary Partnerships

Efficiency may improve when defectors exist

“…Since longer trust-building periods would reduce the payoffs, if the c 0 -d 0 equilibrium is more efficient than c 1 -monomorphic equilibrium, then it is more efficient than any c T -monomorphic equilibrium with T ≧ 1. Finally, note that the bimorphic equilibrium of c 0 -and d 0 -strategy has a weakness that it is vulnerable to a coordinated invasion of c 1 -strategy (Fujiwara-Greve and Okuno-Fujiwara [10] and Vesely and Yang [17]). In other words, it is not neutrally stable.…”

“…Moreover, in the companion paper, Fujiwara-Greve and Okuno-Fujiwara [10], it is shown that (i) the bimorphic equilibrium is robust against a large class of "diverse" entrant distributions, and (ii) among payoff-equivalent Nash equilibria, the bimorphic equilibrium is locally stable for any δ ≧ δ c0d0 , while others are not. Hence, we can conclude that the fundamentally asymmetric equilibrium is reasonably stable.…”

“…Since we focus on the payoff efficiency, not stability, we refer our readers to GO2009 and Fujiwara-Greve and Okuno-Fujiwara [10] for a further stability analysis of the strategies of our focus.…”

“…In GO2009, this strategy is denoted asd-strategy 9. The companion paper by Fujiwara-Greve and Okuno-Fujiwara[10] considers a larger class of defecting strategies (see also Section 5) and analyzes evolutionary stability of the c0-d0 equilibrium.…”