How robust is the welfare state when facing open borders? An evolutionary game-theoretic model

Abstract

Abstract How robust is the welfare state when confronting open borders? To answer that question, we develop an evolutionary game-theoretic model combined with an ingroup–outgroup model. The simulations reveal that welfare states in general will transform into low-welfare societies unless the societies in time generate a sufficiently large amount of social recognition of the reciprocators in such a crisis. The recognition implies that the “always cooperators” in favour of supportive policies towards free riders need to step down and hand over privileges to those willing to reciprocate, namely the “willing punishers”. The open-border society is modelled by letting a small amount of random types enter the society each year. Interestingly, it is not the defectors who compromise high-welfare societies. Instead, it is the excessive presence of cooperators who crowd out the reciprocators, thus making society increasingly vulnerable to free riding. This accentuates the need for timely recognition and actions against the risk of moving towards a low-welfare society.