DEFINITION of 'Iterated Prisoner's Dilemma'
A normal prisoner's dilemma played repeatedly by the same participants. An iterated prisoner's dilemma differs from the original concept of a prisoner's dilemma because participants can learn about the behavioral tendencies of their counterparty.
Next Up
BREAKING DOWN 'Iterated Prisoner's Dilemma'
Since the game is repeated, one individual can formulate a strategy that does not follow the regular logical convention of an isolated round.
"Tit for tat" is a common iterated prisoner's dilemma strategy.
RELATED TERMS

Tit For Tat
A gametheory mechanism which is subject to a payoff matrix similar ... 
Diner's Dilemma
A gametheory situation with several players. Similar to a prisoner's ... 
Prisoner's Dilemma
A paradox in decision analysis in which two individuals acting ... 
Dollar Auction
The basic dollar auction is based on the auction of a $1 bill ... 
Sunk Cost Dilemma
A formal economic term that describes the emotional difficulty ... 
Michael Milken
As an executive at investment bank Drexel Burnham Lambert Inc. ...
Related Articles

Investing
The Business Model Of Private Prisons
How does the business model of private prisons work? 
Markets
Prisoner's Dilemma
Learn more about this classic game theory scenario. 
Markets
Utilizing Prisonerâ€™s Dilemma In Business And The Economy
The Prisonerâ€™s Dilemma, one of the most famous game theories, provides a framework for understanding how to strike a balance between cooperation and competition, and is a very useful tool for ... 
Markets
Advanced Game Theory Strategies For DecisionMaking
The importance of game theory to modern analysis and decisionmaking can be gauged by the fact that since 1970, as many as 12 leading economists and scientists have been awarded the Nobel Prize ... 
Markets
The Biggest Items Obama Is Still Missing From His Mandate
Learn how the biggest items missing from Obama's mandate include various forms of tax reform and closing the Guantanamo Bay prison in Cuba. 
Markets
Five HighProfile CEO Fails
Enron filed for bankruptcy after the SEC accused CEO Kenneth Lay and others of manipulating accounting rules and masking enormous losses and liabilities. 
Managing Wealth
The Science of Making Better Investment Decisions
Neuroeconomics attempts to bridge neuroscience, cognitive psychology and economics in order to understand the mechanisms underlying economic decision making. 
Managing Wealth
4 Must Watch Films and Documentaries for Accountants
Learn how these mustwatch movies for accountants teach about the importance of ethics in a world driven by greed and financial power. 
Markets
Understanding Game Theory
Game theory is a model for making decisions that weighs the benefits of a choice along with the interaction between participants. 
Markets
Who is a Counterparty?
The counterparty is the other party in a financial transaction.
RELATED FAQS

How is game theory related to the Nash equilibrium?
Learn how Nash's equilibrium is an important concept in game theory, and understand how it applies to the common prisoner's ... Read Answer >> 
What does the Nash equilibrium predict?
Learn more about the famous Nash equilibrium, which is the revolutionary concept in game theory about the economics of human ... Read Answer >> 
What is the difference between a dominant strategy solution and a Nash equilibrium ...
Dive into game theory and the Nash equilibrium, and learn why the Nash equilibrium assumptions about information are less ... Read Answer >> 
How does a nation transition from a socialist economy to a free market economy
Read about why and how markets transition from socialism to capitalism, and learn how privatization can become hijacked by ... Read Answer >> 
Why should I invest in the market when I can buy and sell houses or cars?
This is a classic investor dilemma. When the markets are roaring, with 1520% returns, it is tough to imagine putting your ... Read Answer >> 
Why is Game Theory useful in business?
Game theory was once hailed as a revolutionary interdisciplinary phenomenon bringing together psychology, mathematics, philosophy ... Read Answer >>