Iterated Prisoner's Dilemma

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.

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
  1. Tit For Tat

    A game-theory mechanism which is subject to a payoff matrix similar ...
  2. Diner's Dilemma

    A game-theory situation with several players. Similar to a prisoner's ...
  3. Prisoner's Dilemma

    A paradox in decision analysis in which two individuals acting ...
  4. Dollar Auction

    The basic dollar auction is based on the auction of a $1 bill ...
  5. Sunk Cost Dilemma

    A formal economic term that describes the emotional difficulty ...
  6. Michael Milken

    As an executive at investment bank Drexel Burnham Lambert Inc. ...
Related Articles
  1. Fundamental Analysis

    The Business Model Of Private Prisons

    How does the business model of private prisons work?
  2. Economics

    Prisoner's Dilemma

    Learn more about this classic game theory scenario.
  3. Economics

    Utilizing Prisoner’s Dilemma In Business And The Economy

    The Prisoner’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 ...
  4. Professionals

    Oligopolies

    Oligopolies. Learn about the oligopoly, how they are created and how its members interact with one another in the market.
  5. Economics

    Advanced Game Theory Strategies For Decision-Making

    The importance of game theory to modern analysis and decision-making can be gauged by the fact that since 1970, as many as 12 leading economists and scientists have been awarded the Nobel Prize ...
  6. Personal Finance

    Myanmar

    If you're looking for an affordable trip this year, these are your best bets.
  7. Economics

    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.
  8. Investing

    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.
  9. Professionals

    Five High-Profile 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.
  10. Personal Finance

    Mike Tyson

    Publicized sex scandals in America date back centuries. Today, it seems like more sex scandals than ever before are dominating the news.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 15-20% returns, it is tough to imagine putting your ... Read Answer >>
  6. Why is Game Theory useful in business?

    Game theory was once hailed as a revolutionary interdisciplinary phenomenon bringing together psychology, mathematics, philosophy ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center