We analyze in...nitely repeated prisoners’ dilemma games with imperfect private monitoring, and construct sequential equilibria where strategies are measurable with respect to players’ beliefs regarding their opponents’ continuation strategies. We show that, when monitoring is almost perfect, the symmetric e¢cient outcome can be approximated in any prisoners’ dilemma game, while every individua...

We analyze the infinitely repeated prisoners’ dilemma with imperfect private monitoring. The efficient outome can be approximated in any prisoners’ dilemma game, while every individually rational feasible payoff can be approximated in a class of prisoner dilemma games. Our results require that monitoring be sufficiently accurate but do not require very low discounting.

Unlike previous attempts to implement cooperation in a prisoners’ dilemma game with an infinite horizon in the laboratory, we focus on extended prisoners’ dilemma games in which a second (pure strategy) equilibrium allows for voluntary cooperation in all but the last round. Our four main experimental treatments distinguish long versus short horizon and strict versus non-strict additional equili...

Prompted by a real-life observation in the UK retail market, a two-player Prisoners’ Dilemma model of an alliance between two firms is adapted to include the response of a rival firm, resulting in a version of a three-player Prisoners’ Dilemma. We use this to analyse the impact on the stability of the alliance of the rival’s competition, either with the alliance or with the individual partners....

The choice between quantity and price in order to stabilize collusion is modeled here. It is shown that this relocates the prisoners’ dilemma backwards, from the market stage to the stage where the market variable is chosen in order to sustain collusion, and where discount rates appear as the payo¤s. Likewise, a prisoners’ dilemma arises also when both the market variable and the type of behavi...

We report experimental results for a twice-played prisoners’ dilemma in which the players can choose the allocation of the stakes across the two periods. Our point of departure is the assumption that some (but not all) people are willing to cooperate, as long as their opponent is sufficiently likely to do so. The presence of such types can be exploited to enhance cooperation by structuring the ...

Cooperation has always been recognised as a fundamental ingredient in the creation of societies and the generation of wealth. As a concept, it has been studied for many years. Yet, in practice, its emergence and persistence are less understood. In the following a game theoretic approach to the study of cooperation based on the Prisoners' Dilemma is reviewed. Using a Genetic Algorithm, strategie...

We ...nd that cooperation as equilibrium of the in...nitely repeated discounted Prisoner’s Dilemma is often not plausible: For a signi...cant subset of the payo¤discount factor parameter space, all co-operation equilibria are strictly risk dominated (in the sense of Harsanyi and Selten, 1988) by defection. We derive an easy-to-calculate critical level for the discount factor ±¤ below which this...

The Emergence and Evolution of Social Norms: Rational Cooperation in a Finitely Repeated Prisoners’ Dilemma

Recognise that people have many, possibly conflicting, aspects to their personality. We hypothesise that each separate characteristic of a personality may be treated as an independent player in a non-zero sum many player game. This idea is applied to the two person Prisoners’ Dilemma as an introductory example. We assume each prisoner has a “mercenary” characteristic as well as an “altruistic” ...