A non-cooperative Pareto-efficient solution to a one-shot Prisoner's Dilemma

TL;DR

This paper introduces a novel algorithmic approach using complex numbers to achieve Pareto-efficient outcomes in a specific type of one-shot Prisoner's Dilemma, addressing the challenge of non-cooperative rationality.

Contribution

It proposes a self-enforcing algorithmic model for non-cooperative agents to attain Pareto efficiency in a categorized type-4 Prisoner's Dilemma.

Findings

The algorithm successfully finds Pareto-efficient solutions in the specified game type.

The model is applicable to macro-level applications.

It categorizes the Prisoner's Dilemma into five types for detailed analysis.

Abstract

The Prisoner's Dilemma is a simple model that captures the essential contradiction between individual rationality and global rationality. Although the one-shot Prisoner's Dilemma is usually viewed simple, in this paper we will categorize it into five different types. For the type-4 Prisoner's Dilemma game, we will propose a self-enforcing algorithmic model to help non-cooperative agents obtain Pareto-efficient payoffs. The algorithmic model is based on an algorithm using complex numbers and can work in macro applications.