Information Cascades and the Collapse of Cooperation

In various types of structured communities newcomers choose their interaction partners by selecting a role-model and copying their social networks. Participants in these networks may be cooperators who contribute to the prosperity of the community, or cheaters who do not and simply exploit the cooperators. For newcomers it is beneficial to interact with cooperators but detrimental to interact with cheaters. However, cheaters and cooperators usually cannot be identified unambiguously and newcomers' decisions are often based on a combination of private and public information. We use evolutionary game theory and dynamical networks to demonstrate how the specificity and sensitivity of those decisions can dramatically affect the resilience of cooperation in the community. We show that promiscuous decisions (high sensitivity, low specificity) are advantageous for cooperation when the strength of competition is weak; however, if competition is strong then the best decisions for cooperation are risk-adverse (low sensitivity, high specificity). Opportune decisions based on private and public information can still support cooperation but suffer of the presence of information cascades that damage cooperation, especially in the case of strong competition. Our research sheds light on the way the interplay of specificity and sensitivity in individual decision-making affects the resilience of cooperation in dynamical structured communities.