Cooperation, imitation and partial rematching

We study a setting where imitative players are matched into pairs to play a Prisoners’ Dilemma game. A well known result in such setting is that under random matching cooperation vanishes for any interior initial condition. The novelty of this paper is that we consider partial rematching: players that belong to a pair where both parties cooperate repeat partner next period whilst all other players are randomly matched into pairs. This rematching mechanism makes cooperation the unique outcome in the long run under some conditions. Furthermore, we show that if imitation happens infrequently enough then cooperative behavior is always present in the population. JEL Classification: C71, C73, C78.