G-2026-21
Approximate perfect equilibria in finitely repeated Prisoner's Dilemma with asymmetric players
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BibTeX referenceIn this paper, we study a finitely repeated Prisoner's Dilemma in which
players are asymmetric in both their temptation to deviate from cooperation
and their level of patience, as captured by their discount factors. We
investigate whether a profile of limited retaliation strategies constitutes
a perfect \(\varepsilon\)-equilibrium. These strategies impose a mild punishment
on the first player to deviate and allow cooperation to resume after a
finite retaliation period. Any subsequent deviation is punished until the
end of the game. A key feature of these strategies is that, when it exists,
the duration of the retaliation period need not be unique. We characterize
both ex ante and contemporaneous perfect \(\varepsilon\)-equilibria and show how the
duration of the retaliation period depends on asymmetries in the game's
parameters.
Published April 2026 , 18 pages
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