Bounded rationality in volunteering public goods games

Abstract

It is one of the fundamental problems in biology and social sciences how to maintain high levels of cooperation among selfish individuals. Theorists present an effective mechanism promoting cooperation by allowing for voluntary participation in public goods games. But Nash's theory predicts that no one can do better or worse than loners (players unwilling to join the public goods game) in the long run, and that the frequency of participants is independent of loners' payoff. In this paper, we introduce a degree of rationality and investigate the model by means of an approximate best response dynamics. Our research shows that the payoffs of the loners have a significant effect in anonymous voluntary public goods games by this introduction and that the dynamics will drive the system to a fixed point, which is different from the Nash equilibrium. In addition, we also qualitatively explain the existing experimental results.