Cooperation in organisms, whether bacteria or primates, has been a difficulty for evolutionary theory since Darwin. On the assumption that interactions between pairs of individuals occur on a probabilistic basis, a model is developed based on the concept of an evolutionarily stable strategy in the context of the Prisoner's Dilemma game. Deductions from the model, and the results of a computer tournament show how cooperation based on reciprocity can get started in an asocial world, can thrive while interacting with a wide range of other strategies, and can resist invasion once fully established. Potential applications include specific aspects of territoriality, mating, and disease.

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The Evolution of Cooperation

The attainment of quality in products and services has become a pivotal concern of the 1980s. While quality in tangible goods has been described and measured by marketers, quality in services is la...

A Conceptual Model of Service Quality and Its Implications for Future Research

Evidence from past research and insights from an exploratory investigation are combined in a conceptual model that defines and relates price, perceived quality, and perceived value. Propositions ab...

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Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence:

We analyze a sequential decision model in which each decision maker looks at the decisions made by previous decision makers in taking her own decision. This is rational for her because these other decision makers may have some information that is important for her. We then show that the decision rules that are chosen by optimizing individuals will be characterized by herd behavior; i.e., people will be doing what others are doing rather than using their information. We then show that the resulting equilibrium is inefficient.

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A Simple Model of Herd Behavior

Are there economic benefits to improving customer satisfaction? Many firms that are frustrated in their efforts to improve quality and customer satisfaction are beginning to question the link betwe...

Customer satisfaction, market share, and profitability: Findings from Sweden.

THIS paper explores the reasons for and determinants of the provision by a firm of false information to a consumer so as to induce purchases which would not be made if the consumer possessed full information about the qualities of his purchase. Market responses to potential for fraud are analyzed in detail. It is shown that fraud and related practices follow from significant costs both in the determination of quality of a particular good or service and in the effective vertical integration of seller and buyer through some exchange of property rights. Much of our discussion focuses on the key problem of the joint provision of diagnosis and services-such as the choice and execution of an automobile repair or taxicab route--but the model developed will be seen to have general applicability whenever the seller provides information which influences purchases, as through advertising or salesmen's promises. In the context of the repair problem, we explore the reasons for and the determinants of the provision of repair services in amounts greater than would be economically efficient, given the price of the services and their marginal product in terms of the service flow from the repaired commodity.' The possibility of this situation is suggested by the observation that in a considerable number of cases involving medical, automotive, and other repair services, contrary to the basic assumption of conventional demand theory, the consumer is unaware of the ability of the repair service to satisfy a given want.2

Free Competition and the Optimal Amount of Fraud

Risk aversion in the theory of expected utility with rank dependent probabilities

This paper shows that: (1) the "preference reversal" phenomenon can be consistent with transitive preferences if these preferences violate the independence axiom of expected utility theory and (2) for the class of experiments that were used to produce the evidence concerning "preference reversal," the elicitation of certainty equivalents is possible if, and only if, the respondent's preferences can be represented by functionals that are linear in the probabilities. Furthermore, a more general class of experiments is not immune to "preference reversal" if nonexpected utility preferences are admitted. Copyright 1987 by The Econometric Society.

Preference reversal and the observability of preferences by experimental methods

This paper describes a direct revelation mechanism for eliciting agents' subjective probabilities. The game induced by the mechanism has a dominant strategy equilibrium in which the players reveal their subjective probabilities.

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A Mechanism for Eliciting Probabilities

https://www.umass.edu/preferen/You%20Must%20Read%20This/Charness-Karni-Levin-Linda.pdf

Edi Karni

Papers

Free Competition and the Optimal Amount of Fraud

Risk aversion in the theory of expected utility with rank dependent probabilities

Preference reversal and the observability of preferences by experimental methods

A Mechanism for Eliciting Probabilities

On the conjunction fallacy in probability judgment: New experimental evidence regarding Linda