Repeated Games and Cooperation
In the Prisoner’s Dilemma-type game we saw the clear idea that even though by cooperating the outcome could be much better for the players, when the players make the choice in their rational self-interest we end up at a “Bad” equilibrium. Additionally, we saw that these players have a strong incentive to always confess because it is their dominant strategy.
However, in the real world, we do see people cooperate in such situations. It has been found that one of the strongest cooperation mechanisms is repeated interaction. We are much more willing to cooperate with people ...
Get Game Theory now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
