Quotation Berger, Ulrich, De Silva, Hannelore. 2021. Evolution of deterrence with costly reputation information. PLOS ONE. 16 (6), e0253344


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Abstract

Deterrence, a defender’s avoidance of a challenger’s attack based on the threat of retaliation, is a basic ingredient of social cooperation in several animal species and is ubiquitous in human societies. Deterrence theory has recognized that deterrence can only be based on credible threats, but retaliating being costly for the defender rules this out in one-shot interactions. If interactions are repeated and observable, reputation building has been suggested as a way to sustain credibility and enable the evolution of deterrence. But this explanation ignores both the source and the costs of obtaining information on reputation. Even for small information costs successful deterrence is never evolutionarily stable. Here we use game-theoretic modelling and agent-based simulations to resolve this puzzle and to clarify under which conditions deterrence can nevertheless evolve and when it is bound to fail. Paradoxically, rich information on defenders’ past actions leads to a breakdown of deterrence, while with only minimal information deterrence can be highly successful. We argue that reputation-based deterrence sheds light on phenomena such as costly punishment and fairness, and might serve as a possible explanation for the evolution of informal property rights.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal PLOS ONE
Citation Index SCI
Language English
Title Evolution of deterrence with costly reputation information
Volume 16
Number 6
Year 2021
Page from e0253344
Reviewed? Y
URL https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0253344
DOI https://doi.org/10.1371/journal.pone.0253344
Open Access Y
Open Access Link https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0253344
JEL C73

Associations

People
Berger, Ulrich (Details)
De Silva, Hannelore (Details)
Organization
Finance, Accounting and Statistics DP (Details)
Department of Economics DP (Details)
Department of Economics (Berger) (Details)
Research Institute for Cryptoeconomics FI (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
1104 Applied mathematics (Details)
1130 Biomathematics (Details)
1152 Game theory (Details)
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