Generalised Reciprocity and Reputation in the Theory of Cooperation: A Framework

Abstract

Abstract We study the Iterated Bilateral Reciprocity game in which the need for help arises randomly. Players are heterogeneous with respect to ‘neediness’ i.e. probability of needing help. We find bounds on the amount of heterogeneity which can be tolerated for cooperation (all players help when asked to help) to be sustainable in a collectivity. We introduce the notion of Generalised Reciprocity. Individuals make a costly first move to benefit another under the reasonable expectation that either the other or somebody else will reciprocate. We hope that these tentative attempts at extending Axelrod’s seminal work on cooperation will inspire future efforts in the field of organisational culture and social theory more generally.