Repeated games

Definition

Repeated games are strategic interactions where the same players engage in a game multiple times, allowing them to adjust their strategies based on past outcomes. This setting can lead to cooperation between players, as they learn from previous rounds and can build trust over time, which is important in organizational behavior and management.

5 Must Know Facts For Your Next Test

1. In repeated games, players can establish long-term strategies, which often leads to more stable cooperation than in one-shot games.
2. The concept of shadow of the future applies in repeated games; players consider the consequences of their actions today on future interactions.
3. Repeated interactions can promote trust and enable players to coordinate better, reducing the likelihood of conflicts.
4. Strategies like Tit for Tat have been shown to be effective in promoting cooperation, as they encourage mutual support between players.
5. The dynamics of repeated games highlight the importance of reputation and history, as past actions can significantly influence future outcomes.

Review Questions

• How do repeated games influence player behavior compared to one-shot games?
  • Repeated games influence player behavior by allowing individuals to adapt their strategies based on previous interactions. Unlike one-shot games where decisions are made in isolation, repeated interactions create a context where players may prioritize long-term outcomes over short-term gains. This leads to greater potential for cooperation as players can learn from past behaviors and establish a pattern of trust.
• Discuss how the concept of the shadow of the future impacts decision-making in repeated games.
  • The shadow of the future refers to the impact that future interactions have on current decision-making in repeated games. Players are likely to consider how their actions today will affect relationships and outcomes in subsequent rounds. This awareness encourages cooperation since players understand that short-term defection could jeopardize long-term benefits and damage trust between participants.
• Evaluate the effectiveness of cooperative strategies like Tit for Tat in fostering collaboration within organizations through repeated games.
  • Cooperative strategies such as Tit for Tat have been found highly effective in fostering collaboration within organizations when applied through the lens of repeated games. By mirroring the actions of others, this strategy reinforces positive behavior and discourages betrayal, cultivating a cooperative environment. Evaluating this approach reveals its potential to enhance teamwork and trust among colleagues, leading to improved organizational outcomes over time.

Related terms

Nash Equilibrium: A situation in a game where no player can benefit from changing their strategy while the other players keep theirs unchanged.

Prisoner's Dilemma: A classic example of a game theory scenario that illustrates why two individuals might not cooperate, even if it appears that it is in their best interest.

Tit for Tat: A simple strategy in repeated games where a player replicates the opponent's previous action, fostering cooperation through reciprocity.