Iterated Prisoner's Dilemma

AAA

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.

INVESTOPEDIA EXPLAINS '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
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s ...
  2. Deal Breaker

    An issue that, if left unresolved, prompts one party to discontinue ...
  3. Tragedy Of The Commons

    An economic problem in which every individual tries to reap the ...
  4. Tit For Tat

    A game-theory mechanism which is subject to a payoff matrix similar ...
  5. Pareto Efficiency

    An economic state where resources are allocated in the most efficient ...
  6. Diner's Dilemma

    A game-theory situation with several players. Similar to a prisoner's ...
Related Articles
  1. Investing Basics

    What Are The Odds Of Scoring A Winning Trade?

    Just because you're on a winning streak doesn't mean you're a skilled trader. Find out why.
  2. Fundamental Analysis

    Financial Markets: Random, Cyclical Or Both?

    Are the markets random or cyclical? It depends on who you ask. Here, we go over both sides of the argument.
  3. Professionals

    Traditional MBA Or Business Graduate Degree?

    Though an MBA is the most popular business graduate degree, there may be other options more suited to your goals.
  4. Budgeting

    Best Checking Accounts For College Students

    Student checking accounts avoid the high fees and minimum balances of some other accounts. Here's how to evaluate offers and find one with the best terms.
  5. Personal Finance

    What Drives Consumer Demand for Tesla?

    Tesla did not invent the electric vehicle market, but it has brought to it elements of luxury and elite status. But what really drives demand for Teslas?
  6. Personal Finance

    What Does "Magna Cum Laude" Mean?

    Magna cum laude is one of three Latin honors used by many academic institutions to recognize their best students.
  7. Insurance

    4 Smart Ways To Get Health Insurance In College

    These days, those attending college have plenty of ways to get affordable medical insurance, from student health plans to those sold on an exchange.
  8. Economics

    How A Limited Government Affects A Country's Finances

    Countries with limited governments have fewer laws about what individuals and businesses can and can’t do. What's the net result?
  9. Investing Basics

    How Does Goodwill Affect Financial Statements?

    Goodwill is a bit of a paradox--intangible, yet it is recorded as an asset on the purchasing company's balance sheet.
  10. Investing Basics

    Using Normal Distribution Formula To Optimize Your Portfolio

    Normal or bell curve distribution can be used in portfolio theory to help portfolio managers maximize return and minimize risk.

You May Also Like

Hot Definitions
  1. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  2. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  3. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  4. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  5. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  6. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
Trading Center