Abstract

This paper argues that gossip can be a central element in inducing cooperation. The underlying assumption here is that human beings value payoffs in most societies, and are willing to have less now for more in the future. This basic interaction is tempered through gossip - as our behavior now may affect our future interactions and subsequent payoffs. As such, reputation matters and plays a crucial role in inducing cooperation. In order for gossip to be an effective policing mechanism a number of conditions must be met: namely, there must be an incentive for behavior and the behavior must be conducted in a credible manner. Herein lies the utility of charisma and perhaps problem, in inducing cooperation.