Cooperating Through Leaders

Abstract We model conflict as a prisoner’s dilemma between two groups represented by leaders: two group leaders who share group preferences and a common leader concerned with overall welfare. Leaders make recommendations and promises, and face penalties for unfulfilled commitments. A common leader who can be punished adequately and moves last induces cooperation. When the common leader does not move last, cooperation can still emerge with high probability provided the group leaders face large penalties for broken promises. The model highlights accountability and timing as key mechanisms sustaining cooperation between groups.