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.

  1. Diner's Dilemma

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

    A paradox in decision analysis in which two individuals acting ...
  3. Sunk Cost Dilemma

    A formal economic term that describes the emotional difficulty ...
  4. Traveler's Dilemma

    A non-zero-sum game played by two participants in which both ...
  5. Natural Capital

    A reference to the stock of natural resources, such as water ...
  6. Counterparty

    The other party that participates in a financial transaction. ...
Related Articles
  1. Investing

    Prison Stocks Boosted by Justice Dept. Reversal of Scale Back

    The DOJ’s reversal of the decision to scale back private prisons represents good news for prison stocks.
  2. Insights

    Former Convict? Become A Consultant

    Even convicted criminals are becoming consultants with Wall Street prison consulting.
  3. Investing

    Zuckerberg May Spend Billions on Prison Reform

    Facebook's CEO will sell 75M shares with the proceeds going to fund his favored social issues.
  4. Insights

    Crime Vs Time: Madoff Faces Off Against Fellow Fraudsters

    Madoff received the maximum allowable time for his sentence - much more than any white-collar criminal before him.
  5. Investing

    Prison Stock 'That's Hot' (CXW, GEO)

    Paris Hilton's recent jail stint has investors thinking about private jails. Learn why three jail stocks are hitting new highs.
  6. Insights

    How JPay Works and Makes Money

    JPay exploits a huge, untapped part of America's prison system by providing payment and technology services to inmates throughout the United States.
  7. Investing

    Understanding Social Impact Bonds

    Social impact bonds are powerful investment vehicles for the solving of social issues in a sustainable fashion.
  8. Financial Advisor

    Ethical Issues For Financial Advisors

    Financial advisors may face ethical issues in their work. Find out what they are.
  9. Investing

    The Trump vs. Ford Dilemma (F)

    Trump called Ford a disgrace for moving jobs to Mexico. Here is Ford’s reply.
  10. Investing

    ETFs: Coming Soon to 401(k) Plans

    The new fiduciary rule could drive more 401(k) plans to include ETFs, which are typically lower cost investments than mutual funds.
  1. 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 >>
  2. Who is the counterparty of a derivative?

    Learn about the counterparty to a derivative contract, and how derivative swap agreements traded over the counter have counterparty ... Read Answer >>
  3. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    A detailed rundown of the provisions of the Sarbanes-Oxley Act, including strict disclosures, criminal liability and audit ... Read Answer >>
Hot Definitions
  1. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  2. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  3. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  4. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
  5. Annuity

    An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income ...
  6. Restricted Stock Unit - RSU

    A restricted stock unit is a compensation issued by an employer to an employee in the form of company stock.
Trading Center