Voluntarily Separable Repeated Prisoner's Dilemma

Takako Fujiwara-Greve and Masahiro Okuno-Fujiwara ()

No CIRJE-F-599, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: Ordinary repeated games do not apply to real societies where one can cheat and escape from partners. We formulate a model of endogenous relationships that a player can unilaterally end and start with a randomly-assigned new partner with no information flow. Focusing on two-person, two-action Prisoner's Dilemma, we show that the endogenous duration of partnerships generates a significantly different evolutionary stability structure from ordinary random matching games. Monomorphic equilibria require initial trust-building, while a polymorphic equilibrium includes earlier cooperators than any strategy in monomorphic equilibria and is thus more efficient. This is due to the nonlinearity of average payoffs.Length: 37pages

Date: 2008-10
New Economics Papers: this item is included in nep-evo and nep-gth
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Citations: View citations in EconPapers (2)

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Journal Article: Voluntarily Separable Repeated Prisoner's Dilemma (2009)
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