kaal:claim:3782203-032

Cooperation is sustained only when the promise of future profits outweighs the present value of defecting, so a discount factor that is too low, or a game known to be ending soon, makes defection the rational choice.

Therefore, the promise of future profits must outweigh the present value to en- sure cooperation.

Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021), Application to reputation tokens, p. 20
https://ssrn.com/abstract=3782203 · source PDF

Craig Calcaterra, Wulf A. Kaal, A Technical Perspective on Decentralization (2021). SSRN: https://ssrn.com/abstract=3782203

• repeated games with end periods
• impatient players or high discounting

conditionsupport: arguedfailure: end-period-defectionfamily: collective-action-and-coordination-failurereputationtokenomics

• extended_by kaal:claim:3782214-024 Reputation can be objectively valued by estimating the probability of future business deals, taking the expect...

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