Abstract

The Prisoner's Dilemma essentially is the simplistic core of game theory, in which there are two players with only two options: to defect or to cooperate. From there, if these two players play once, just a basic Prisoner's Dilemma game, their dominant strategy is to defect since no matter what their opponent plays, they are better off if they defect. Thus, we assume players are egoists, playing to maximize their own benefits independent of the effects on their opponent.

This simple game can be played many times, changing the optimal strategies for the players and making everything much more complicated. Once the game is played more than once, it is called the Iterated Prisoner's Dilemma, since there are multiple iterations, or rounds. There are certain assumptions that add to the Iterated Prisoner's Dilemma, especially if you want to increase the number of players, although players must always play one-on-one to stimulate this style dilemma. For a more in-depth treatment of the Prisoner's Dilemma and its Iterated extensions, please consult our background page.

From there, opens up the field of Agent-Based Modeling (ABM): the computational study of these economic processes, modeled through dynamic and complex systems with interacting agents, or players in this context. Developing computer simulation technology and techniques have truly opened up this field in the past few decades.