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Title:Tacit collusion in an infinitely repeated prisoners' dilemma PDF Logo
Authors:Harrington, Joseph E.
Zhao, Wei
Issue Date:2010
Series/Report no.:Working papers // the Johns Hopkins University, Department of Economics 559
Abstract:In the context of an infinitely repeated Prisoners' Dilemma, we explore how cooperation is initiated when players communicate and coordinate through their actions. There are two types of players - patient and impatient - which are private information. An impatient type is incapable of cooperative play, while if both players are patient types - and this is common knowledge - then they can cooperate with a grim trigger strategy. We find that the longer that players have gone without cooperating, the lower is the probability that they'll cooperate in the next period. While the probability of cooperation emerging is always positive, there is a positive probability that cooperation never occurs.
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, The Johns Hopkins University

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