Question
Imagine that each group of 8 is made up of two types of people: 4 who are conditional cooperators: they start any play with a
Imagine that each group of 8 is made up of two types of people: 4 who are "conditional cooperators": they start any play with a new group by contributing their full endowment, but only continue to cooperate if half or more of the rest of the community contributed their full endowment in the last round played. The other 4 group members are rational actors ("economists") who play according to standard theory.
d) What will happen to the pattern of cooperation in the first round and then in each round after that in the standard game? Calculate the sum of all payoffs per round after the first round.
e) Imagine that a group, still split into 4 conditional cooperators and 4 economists, introduces an expulsion mechanism like the one in Cinyabuguma (2005), whereby the community can vote out free riders as long as exactly 50% or more vote yes. Those voted out are moved from the 'green' group to the 'blue' group where they play separately with the same MPCR of 0.4 but with an endowment of only 5. First, assume that they are not told about the expulsion option until after they make their contributions. Describe what will happen to contributions after round 1 in both the green and blue group if the conditional cooperators vote to expel all of the "economists" in round 1? What is the effect (relative to your answer for the standard game in question (d)) of this expulsion on efficiency over all remaining rounds of play?
f) Now assume that the group (still made up of conditional cooperators and economists) knows that the expulsion option will be available from the start. Based on your reading of the paper of Cinyabuguma (2005) what do you predict will happen in the first round and after that, in terms of the play of economists, and the decisions to expel?
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