Ahmed Doghmi () (Strategic Interaction Group, Max Planck Institute of Economics, Jena, Germany) Miloudi Kobiyh () (Center for Research in Economics and Management, University of Caen, France)
Abstract
In this paper, we introduce the concept of payoff distortion in the standard prisoner's dilemma game when strategies are driven by psychological behaviors. This concept enables to take account each player's assessment of the other player's behavior and the asymmetry of information. We determine the conditions which allow that mutual cooperation constitutes the equilibrium. we particularly focus on the reciprocity in case of complete and incomplete information about the payoffi distortion. We show that mutual cooperation is a Nash equilibrium with complete information and is a Bayesian equilibrium when each player believes that his opponent behaves with "large" reciprocity in incomplete information environment.
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Publisher Info
Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek in its series Jena Economic Research Papers in Economics with number
2009-072.
Find related papers by JEL classification: C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
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