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Prisoner’s Dilemma Played More Than Once

As we saw in class, the only Nash Equilibrium in a Prisoner’s Dilemma is for both players to defect. Their total payoff is not maximized and they both go to jail. It’s unfortunate that a Nash Equilibrium doesn’t neccesarily maximize payoff for either player or the sum of their payoffs. Wouldn’t it be nice if everyone could be selfless and cooperate for the greater good of both players?

Well, there is good news, situations in life that have similar payoff matrices to the Prisoner’s dilemma need not always stay on their Nash Equilibrium. The reason is that these are not singular occurences. There was actually a tournament┬áin which game theorists submitted programs that played a prisoner’s dilemma game. The dominant strategy, to defect, was not the winning strategy. The winner was a strategy called tit-for-tat. Tit-for-tat initially cooperates, then in every game thereafter copies its opponent’s last move. When tit-for-tat is paired against itself, both players always cooperate and payoff for both players is maximized. This is an uplifting result, because, in life, no game is only played once. So, when we interact with others we should keep our long term payoff in mind and choose to act like tit-for-tat instead of only focusing on short term and always defecting.

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