Reputation in the Iterated Prisoner's Dilemma: A Simple, Analytically Solvable Agents' Model.

Abstract

This study introduces a simple model, which can be used to examine the influence of reputation on expected income achieved within the Iterated Prisoner's Dilemma (IPD) game framework. The research explores how different reputation distributions among society members impact overall outcomes by modeling a society of agents, each characterized by a reputation score that dictates their likelihood of cooperation. Due to the simplicity of the model, we can analytically determine the expected incomes based on the distribution of agents' reputations and model parameters. The results show that a higher reputation generally leads to greater expected income, thereby promoting cooperation over defection. However, in some cases, where there are more defecting individuals, the expected income reaches the maximum for agents with an average reputation, and then decreases for individuals who cooperate more. Various scenarios, including uniform, increasing, and decreasing reputation distributions, are analyzed to understand their effects on the promoted interaction strategy. Finally, we outline future extensions of the model and potential research directions, including the exploration of alternative reputation distributions, variable interaction parameters, and different payoff structures in the dilemma games.