Behavioral Theory of Repeated Prisoner’s Dilemma: Generous Tit-For-Tat Strategy

Hitoshi Matsushima

The B.E. Journal of Theoretical Economics, 2020, vol. 20, issue 1, 11

Abstract: This study investigates infinitely repeated games of a prisoner’s dilemma with additive separability in which the monitoring technology is imperfect and private. Behavioral incentives indicate that a player is not only motivated by pure self-interest but also by social preference such as reciprocity, and that a player often becomes naïve and selects an action randomly due to her cognitive limitation and uncertain psychological mood as well as the strategic complexity caused by monitoring imperfection and private observation. By focusing on generous tit-for-tat strategies, we characterize a behavioral version of Nash equilibrium termed behavioral equilibrium in an accuracy-contingent manner. By eliminating the gap between theory and evidence, we show that not pure self-interest but reciprocity plays a substantial role in motivating a player to make decisions in a sophisticated manner.

Keywords: repeated prisoner’s dilemma; imperfect private monitoring; generous tit-for-tat strategy; reciprocity; naïveté; behavioral equilibrium (search for similar items in EconPapers)
JEL-codes: C70 C71 C72 C73 D03 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/bejte-2019-0030 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejtec:v:20:y:2020:i:1:p:11:n:1

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejte/html

DOI: 10.1515/bejte-2019-0030

Access Statistics for this article

The B.E. Journal of Theoretical Economics is currently edited by Burkhard C. Schipper

More articles in The B.E. Journal of Theoretical Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().