Evolution of Strategies in Repeated Games with Discounting
AbstractIn repeated games there is in general a large set of equilibria. We also know that in the repeated prisoners dilemma there is a profusion of neutrally stable strategies, but no strategy that is evolutionarily stable. This paper investigates whether and how neutrally stable strategies can be upset in a process of mutation and selection. While neutral stability excludes that mutants have a selective advantage themselves, it does not rule out the possibility that mutants that are neutral can enter a population and create a selective advantage for a second mutant. This will be called an indirect invasion and the central results show that, for high enough continuation probability, there is no strategy that is robust against indirect invasions. Such stepping stone paths out of equilibrium generally exist both in the direction of more and in the direction of less cooperation.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 06-115/1.
Date of creation: 04 Jan 2007
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Repeated games; evolutionary stability; robust against indirect invasions.;
Find related papers by JEL classification:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-10 (All new papers)
- NEP-EVO-2007-02-10 (Evolutionary Economics)
- NEP-GTH-2007-02-10 (Game Theory)
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