BEE Lecture Series - Yuval Heller (Bar-Ilan University)

In this talk I will discuss my perspective on evolutionary game theory and its economic applications. I will demonstrate my approach by presenting my recent paper on "observations on cooperation" (joint with Erik Mohlin). The paper studies environments in which agents are randomly matched to play a Prisoner’s Dilemma, and each player observes a few of the partner’s past actions against previous opponents. We depart from the existing related literature by allowing a small fraction of the population to be commitment types.  We present a novel intuitive combination of strategies that sustains cooperation in various environments. Moreover, we show that under an additional assumption of stationarity, this combination of strategies is essentially the unique mechanism to support full cooperation, and it is robust to various perturbations.