Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250684 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15023
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In an experiment on the repeated prisoner's dilemma where intended actions are implemented with noise, Fudenberg et al. (2012) observe that non-equilibrium strategies of the "tit-for-tat" family are largely adopted. Furthermore, they do not find support for risk dominance of TFT as a determinant of cooperation. This comment introduces the "Payback" strategy, which is similar to TFT but is sustainable in equilibrium. Using the data from the original article, we show that Payback captures most of the empirical support previously attributed to TFT, and that the risk dominance criterion based on Payback can explain the observed cooperation patterns.
Subjects: 
asymmetric strategies
imperfect monitoring
indefinitely repeated games
risk dominance
strategic risk
JEL: 
C72
C73
C91
D82
Document Type: 
Working Paper

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