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Cooperative Equilibria in Iterated Social Dilemmas

In: Proceedings of the 6th International Symposium on Algorithmic Game Theory, Lecture Notes in Computer Science 8146 (2013) pp. 146-158.

12 Pages Posted: 24 May 2013 Last revised: 31 Mar 2014

Valerio Capraro

Middlesex University

Matteo Venanzi

University of Southampton

Maria Polukarov

University of Southampton

Nicholas R. Jennings

University of Southampton

Date Written: May 23, 2013

Abstract

The implausibility of the extreme rationality assumptions of Nash equilibrium has been attested by numerous experimental studies with human players. In particular, the fundamental social dilemmas such as the Traveler's dilemma, the Prisoner's dilemma, and the Public Goods game demonstrate high rates of deviation from the unique Nash equilibrium, dependent on the game parameters or the environment in which the game is played. These results inspired several attempts to develop suitable solution concepts to more accurately explain human behaviour. In this line, the recently proposed notion of cooperative equilibrium, based on the idea that players have a natural attitude to cooperation, has shown promising results for single-shot games. In this paper, we extend this approach to iterated settings. Specifically, we define the Iterated Cooperative Equilibrium (ICE) and show it makes statistically precise predictions of population average behaviour in the aforementioned domains. Importantly, the definition of ICE does not involve any free parameters, and so it is fully predictive.

Keywords: Cooperation, Cooperative Equilibrium, Iterated Prisoner's Dilemma, Iterated Traveler's Dilemma, Iterated Public Goods Game

JEL Classification: C72, H11

Suggested Citation

Capraro, Valerio and Venanzi, Matteo and Polukarov, Maria and Jennings, Nicholas R., Cooperative Equilibria in Iterated Social Dilemmas (May 23, 2013). In: Proceedings of the 6th International Symposium on Algorithmic Game Theory, Lecture Notes in Computer Science 8146 (2013) pp. 146-158.. Available at SSRN: https://ssrn.com/abstract=2268998 or http://dx.doi.org/10.2139/ssrn.2268998

Valerio Capraro (Contact Author)

Middlesex University ( email )

The Burroughs
London, NW4 4BT
United Kingdom

Matteo Venanzi

University of Southampton ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

Maria Polukarov

University of Southampton ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

Nicholas R. Jennings

University of Southampton ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

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