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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

Abstract: 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)
Date: 2016
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