Consider a repeated prisoner's dilemma game. The likelihood of a cooperative outcome rises when:
A)they value payoffs in future periods much less than they value payoffs in the current period.
B)Interactions between the players are frequent.
C)Cheating is difficult to detect.
D)The one-time gain from cheating is large in comparison to the eventual cost of cheating.

Question

Quizplus · Accepted Answer

Frequent interactions between players increase the incentives for cooperation because it allows for the possibility of future rewards for cooperative behavior and future punishments for non-cooperative behavior. Players are more likely to cooperate in order to build up a reputation for being trustworthy and avoid being punished in the future. If interactions between the players are frequent, they have more opportunities to punish each other for cheating and to establish a reputation for cooperation. This can lead to a cooperative outcome in the long run, even if there are some betrayals along the way. Option A would make players focus only on their short-term gain, which could lead to defection instead of cooperation. Option C would make defection more attractive and easier to get away with, which could undermine cooperation. Option D would make cheating more tempting and lead to a breakdown of trust, as the eventual cost of cheating would not deter players from defecting in the present.

Consider a Repeated Prisoner's Dilemma Game