Full Text

Earlier Version: "Evolution and Information in a Prisoner's Dilemma Game"

Evolution and Information in a Gift Giving Game

Phillip Johnson, David K. Levine and Wolfgang Pesendorfer

October 25, 1996

revised: May 18, 1999

Abstract: In an environment of anonymous random matching, Kandori [1992] showed that with a sufficiently rich class of simple information systems the folk theorem holds. We specialize to a gift-giving game and examine the stochastic stability of a process of learning and evolution in this setting. If the benefit of future altruism is too small, then there is no altruism. When the benefit of altruism is large then only altruism will survive in the very long run.