Essays on cooperation and competition.

Abstract

Understanding the basic concepts of cooperation and competition is fundamental to understanding economic and social behavior. These essays explore two somewhat different areas in which cooperation and competition play a role. This dissertation explores how cooperative behavior evolves and is sustained in situations which can be modeled with the Prisoners' Dilemma. This is accomplished primarily through computer simulations. First, a replication Robert Axelrod's famous Prisoners' Dilemma tournament with the payoffs calculated to take the infinite nature of the game into account is performed. Then a number of computer simulations are run to analyze how stable these results are in the presence of mutation and to see what characteristics the successful strategies have in this situation. The results indicate there are certain characteristics which lead to evolutionary success in these environments. TIT-FOR-TAT is not evolutionarily successful in some of these simulations because complexity is taken into account. Also, the ability to take advantage of poor strategies which result from mutation appears to be important to evolutionary success. The rent-seeking games originally modeled by Gordon Tullock are then investigated. Two modifications to the existing literature are explored. First, these games are modified to be played sequentially. Here we can examine what happens if one player is allowed to go first in these games. Next, the players' valuations for the prize in these games are modified to be vectors. This allows players to have different preferences over who wins the prize. The results of this study indicate total rent-seeking expenditure depends on which player goes first and their relative valuations. This work also explains why some players may choose not to participate in these contests. If prizes are to some extent public goods, this essay shows that total rent seeking expenditures will decrease. Also, if some of the players share interests with some of the others, the more they have in common with those players the less likely any of them are to win. The results here have applications in political, international, and military competition.