In and out of equilibrium I: Evolution of strategies in repeated games with discounting
Julián García and
Matthijs van Veelen
Journal of Economic Theory, 2016, vol. 161, issue C, 161-189
In the repeated prisoner's dilemma there is no strategy that is evolutionarily stable, and a profusion of neutrally stable ones. But how stable is neutrally stable? We show that in repeated games with large enough continuation probabilities, where the stage game is characterized by a conflict between individual and collective interests, there is always a neutral mutant that can drift into a population that is playing an equilibrium, and create a selective advantage for a second mutant. The existence of stepping stone paths out of any equilibrium determines the dynamics in finite populations playing the repeated prisoner's dilemma.
Keywords: Repeated games; Evolutionary game theory (search for similar items in EconPapers)
JEL-codes: C73 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:161:y:2016:i:c:p:161-189
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