Playing cooperatively with possibly treacherous partner

TL;DR

This paper introduces m-equilibrium, a new concept in game theory that offers alternative solutions to normal form games, demonstrating robustness and differences from traditional Nash equilibrium and related concepts.

Contribution

The paper proposes m-equilibrium, a novel equilibrium concept that differs from Nash and Harsanyi-Selten equilibria, with demonstrated advantages in game analysis.

Findings

M-equilibria provide nontrivial solutions in classic games.

M-equilibria are resistant to iterated elimination of dominated strategies.

Comparison shows differences between m-equilibrium and traditional equilibria.

Abstract

We investigate an alternative concept of Nash equilibrium, m-equilibrium, which slightly resembles Harsanyi-Selten risk dominant equilibrium although it is a different notion. M-equilibria provide nontrivial solutions of normal form games as shown by comparison of the Prisoner's Dilemma with the Traveler's Dilemma. They are also resistant on the deep iterated elimination of dominated strategies.