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Direct Reciprocity and Model-Predictive Strategy Update Explain the Network Reciprocity Observed in Socioeconomic Networks

1
Department of Electronics, Information, and Bioengineering, Politecnico di Milano, 20133 Milan, Italy
2
Department of Electrical Engineering and Information Technology, Universita’ degli studi di Napoli, Federico II, 80125 Naples, Italy
*
Author to whom correspondence should be addressed.
Games 2020, 11(1), 16; https://doi.org/10.3390/g11010016
Received: 24 November 2019 / Revised: 17 February 2020 / Accepted: 20 February 2020 / Published: 16 March 2020
(This article belongs to the Special Issue Behavioral Game Theory: Theory and Experiments)
Network reciprocity has been successfully put forward (since M. A. Nowak and R. May’s, 1992, influential paper) as the simplest mechanism—requiring no strategical complexity—supporting the evolution of cooperation in biological and socioeconomic systems. The mechanism is actually the network, which makes agents’ interactions localized, while network reciprocity is the property of the underlying evolutionary process to favor cooperation in sparse rather than dense networks. In theoretical models, the property holds under imitative evolutionary processes, whereas cooperation disappears in any network if imitation is replaced by the more rational best-response rule of strategy update. In social experiments, network reciprocity has been observed, although the imitative behavior did not emerge. What did emerge is a form of conditional cooperation based on direct reciprocity—the propensity to cooperate with neighbors who previously cooperated. To resolve this inconsistency, network reciprocity has been recently shown in a model that rationally confronts the two main behaviors emerging in experiments—reciprocal cooperation and unconditional defection—with rationality introduced by extending the best-response rule to a multi-step predictive horizon. However, direct reciprocity was implemented in a non-standard way, by allowing cooperative agents to temporarily cut the interaction with defecting neighbors. Here, we make this result robust to the way cooperators reciprocate, by implementing direct reciprocity with the standard tit-for-tat strategy and deriving similar results. View Full-Text
Keywords: direct reciprocity; evolutionary game theory; model-predictive strategy update; network reciprocity; prisoner’s dilemma; tit-for-tat direct reciprocity; evolutionary game theory; model-predictive strategy update; network reciprocity; prisoner’s dilemma; tit-for-tat
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Della Rossa, F.; Dercole, F.; Di Meglio, A. Direct Reciprocity and Model-Predictive Strategy Update Explain the Network Reciprocity Observed in Socioeconomic Networks. Games 2020, 11, 16.

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