Advanced Search
MyIDEAS: Login

Evolutionary Exploration of the Finitely Repeated Prisoners’ Dilemma—The Effect of Out-of-Equilibrium Play

Contents:

Author Info

  • Kristian Lindgren

    ()
    (Complex Systems Group, Department of Energy and Environment, Chalmers University of Technology, SE-412 96 Göteborg, Sweden)

  • Vilhelm Verendel

    ()
    (Complex Systems Group, Department of Energy and Environment, Chalmers University of Technology, SE-412 96 Göteborg, Sweden)

Registered author(s):

    Abstract

    The finitely repeated Prisoners’ Dilemma is a good illustration of the discrepancy between the strategic behaviour suggested by a game-theoretic analysis and the behaviour often observed among human players, where cooperation is maintained through most of the game. A game-theoretic reasoning based on backward induction eliminates strategies step by step until defection from the first round is the only remaining choice, reflecting the Nash equilibrium of the game. We investigate the Nash equilibrium solution for two different sets of strategies in an evolutionary context, using replicator-mutation dynamics. The first set consists of conditional cooperators, up to a certain round, while the second set in addition to these contains two strategy types that react differently on the first round action: The ”Convincer” strategies insist with two rounds of initial cooperation, trying to establish more cooperative play in the game, while the ”Follower” strategies, although being first round defectors, have the capability to respond to an invite in the first round. For both of these strategy sets, iterated elimination of strategies shows that the only Nash equilibria are given by defection from the first round. We show that the evolutionary dynamics of the first set is always characterised by a stable fixed point, corresponding to the Nash equilibrium, if the mutation rate is sufficiently small (but still positive). The second strategy set is numerically investigated, and we find that there are regions of parameter space where fixed points become unstable and the dynamics exhibits cycles of different strategy compositions. The results indicate that, even in the limit of very small mutation rate, the replicator-mutation dynamics does not necessarily bring the system with Convincers and Followers to the fixed point corresponding to the Nash equilibrium of the game. We also perform a detailed analysis of how the evolutionary behaviour depends on payoffs, game length, and mutation rate.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.mdpi.com/2073-4336/4/1/1/pdf
    Download Restriction: no

    File URL: http://www.mdpi.com/2073-4336/4/1/1/
    Download Restriction: no

    Bibliographic Info

    Article provided by MDPI, Open Access Journal in its journal Games.

    Volume (Year): 4 (2013)
    Issue (Month): 1 (January)
    Pages: 1-20

    as in new window
    Handle: RePEc:gam:jgames:v:4:y:2013:i:1:p:1-20:d:22566

    Contact details of provider:
    Web page: http://www.mdpi.com/

    Related research

    Keywords: backward induction; rationality; prisoners’ dilemma; evolutionary dynamics;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Aumann, Robert J., 1995. "Backward induction and common knowledge of rationality," Games and Economic Behavior, Elsevier, vol. 8(1), pages 6-19.
    2. Cressman, R. & Schlag, K. H., 1998. "The Dynamic (In)Stability of Backwards Induction," Journal of Economic Theory, Elsevier, vol. 83(2), pages 260-285, December.
    3. Ponti, Giovanni, 2000. "Cycles of Learning in the Centipede Game," Games and Economic Behavior, Elsevier, vol. 30(1), pages 115-141, January.
    4. Noldeke Georg & Samuelson Larry, 1993. "An Evolutionary Analysis of Backward and Forward Induction," Games and Economic Behavior, Elsevier, vol. 5(3), pages 425-454, July.
    5. Antoni Bosch-Dom�nech & Jos� G. Montalvo & Rosemarie Nagel & Albert Satorra, 2002. "One, Two, (Three), Infinity, ...: Newspaper and Lab Beauty-Contest Experiments," American Economic Review, American Economic Association, vol. 92(5), pages 1687-1701, December.
    6. Ken Binmore, 1997. "Rationality and backward induction," Journal of Economic Methodology, Taylor & Francis Journals, vol. 4(1), pages 23-41.
    7. Sergiu Hart, 1999. "Evolutionary Dynamics and Backward Induction," Game Theory and Information 9905002, EconWPA, revised 23 Mar 2000.
    8. Binmore, Ken, 1988. "Modeling Rational Players: Part II," Economics and Philosophy, Cambridge University Press, vol. 4(01), pages 9-55, April.
    9. Basu, Kaushik, 1994. "The Traveler's Dilemma: Paradoxes of Rationality in Game Theory," American Economic Review, American Economic Association, vol. 84(2), pages 391-95, May.
    10. Binmore, Ken, 1987. "Modeling Rational Players: Part I," Economics and Philosophy, Cambridge University Press, vol. 3(02), pages 179-214, October.
    11. Rosenthal, Robert W., 1981. "Games of perfect information, predatory pricing and the chain-store paradox," Journal of Economic Theory, Elsevier, vol. 25(1), pages 92-100, August.
    12. E. Samanidou & E. Zschischang & D. Stauffer & T. Lux, 2007. "Agent-based Models of Financial Markets," Papers physics/0701140, arXiv.org.
    13. Aumann, Robert J., 1996. "Reply to Binmore," Games and Economic Behavior, Elsevier, vol. 17(1), pages 138-146, November.
    14. Selten, Reinhard & Stoecker, Rolf, 1986. "End behavior in sequences of finite Prisoner's Dilemma supergames A learning theory approach," Journal of Economic Behavior & Organization, Elsevier, vol. 7(1), pages 47-70, March.
    15. Ken Binmore & Larry Samuelson, 2010. "Evolutionary Drift and Equilibrium Selection," Levine's Working Paper Archive 390, David K. Levine.
    16. Nachbar, John H., 1992. "Evolution in the finitely repeated prisoner's dilemma," Journal of Economic Behavior & Organization, Elsevier, vol. 19(3), pages 307-326, December.
    17. Binmore, Ken & Samuelson, Larry, 1999. "Evolutionary Drift and Equilibrium Selection," Review of Economic Studies, Wiley Blackwell, vol. 66(2), pages 363-93, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:gam:jgames:v:4:y:2013:i:1:p:1-20:d:22566. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (XML Conversion Team).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.