disturbing game theory realization followed by relief
There are two kinds of repeated prisoner’s dilemma. In the infinite horizon version, no one knows how long you’ll be playing prisoner’s dilemma. So, it ends up paying to play Tit for Tat. In the finite horizon version, everyone knows how long you’ll be playing prisoner’s dilemma. So on the last play, you should be nasty. But that means that on the second to last play, you should also be nasty, since you can’t benefit from cooperating. But that means you should be nasty on the third to last play, and so on by induction down to the first play. Nasty all the time.
All previously infinite-horizon games suddenly look like finite-horizon games. Thank goodness the assumption that players are rational and don’t make mistakes is hogwash…
