Prisoners' Other Dilemma

Giancarlo Spagnolo and Matthias Blonski

No 437, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: We find that contrary to common perception, cooperation as equilibrium of the infinitely repeated discounted prisoner's dilemma is in many relevant cases not very plausible, or at least questionable: for a significant subset of the payoff-discount factor parameter space cooperation equilibria are strictly risk dominated by non-cooperation (according to the Harsanyi-Selten 1988 criterion). Examples include collusion equilibria in the repeated Cournot duopoly.

Keywords: Prisoner's Dilemma; Risk dominance; Repeated games; Equilibrium selection; Cooperation; Collusion (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2001-02-20, Revised 2001-08-04
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Citations: View citations in EconPapers (24)

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Related works:
Journal Article: Prisoners’ other Dilemma (2015)
Working Paper: Prisoners' Other Dilemma (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0437

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