Necessary and sufficient conditions are derived under which the Tit-for-Tat strategy pair is a subgame perfect equilibrium in the standard discounted prisoner's dilemma. The sensitivity of the equilibrium to changes in the discount parameters is shown to be a common feature of all such nontrivial "reactive" equilibria. This appears to rule them out as reasonable solutions to the discounted prisoner's dilemma. In remarks, we indicate how these results can be extended to a fairly general class of games.
ASJC Scopus subject areas
- Statistics and Probability
- Mathematics (miscellaneous)
- Social Sciences (miscellaneous)
- Economics and Econometrics
- Statistics, Probability and Uncertainty