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For the iterated Prisoner’s Dilemma, there exist Markov strategies which solve the problem when we restrict attention to the long term average payoff. When used by both players these assure the cooperative payoff for each of them. Neither player can benefit by moving unilaterally any other strategy, i.e. these are Nash equilibria. In addition, if a player uses instead an alternative which decreases the opponent’s payoff below the cooperative level, then his own payoff is decreased as well. Thus, if we limit attention to the long term payoff, these good strategies effectively stabilize cooperative behavior. We characterize these good strategies and analyze their role in evolutionary dynamics.

The iterated Prisoner’s Dilemma: good strategies and their dynamics