Pedagogy in Action > Library > Teaching with Simulations > Economics Examples > Iterated Prisoner's Dilemma

Iterated Prisoner's Dilemma

A lab exercise by Mark E. McBride, Miami University. The lab exercise utilizes a modified version of Wilensky, U. 2002. NetLogo PD Two Person Iterated model. http://ccl.northwestern.edu/netlogo/models/PDTwoPersonIterated. Center for Connected Learning and Computer-Based Modeling, Northwestern University, Evanston, IL. The Netlogo model simulates aspects of the computerized iterated prisoner dilemma contests conducted by Axelrod in the early 1980's.
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This material was originally created for Starting Point: Teaching Economics
and is replicated here as part of the SERC Pedagogic Service.

Summary

In the iterated prisoner's dilemma lab, students explore the consequences of following alternative strategies (e.g., tit-for-tat, unforgiving, ...) in an interated prisoner's dilemma game. Students complete a lab report in preparation for class discussion.

Learning Goals

The iterated prisoner's dilemma lab is structured to help students understand:
repeated games in oligopolistic markets
repeated games and tacit collusion.

Context for Use

The simulation can be used in the principles of microeconomics course (or higher level microeconomics courses) of any class size since the simulation is web-based. The student needs a modern browser capable of running Java. Students learn how to use the simulation through a lab exercise which guides the students through a simple experimental design. The simulation and lab are designed to be used after the students have learned the basic prisoner's dilemma model.

Description and Teaching Materials

The simulation and sample lab are available at:

http://mcbridme.sba.muohio.edu/ace/labs

The student goes to the above site. A lab exercise (pdf) is available for download by the student. The exercise steps them through running the simulation exercise.

The simulation runs within the browser window. There is an option for the student to download the Netlogo model and run the simulation from within Netlogo directly. The description of the simulation is included below the simulation: what it is, how it works, how to use it, things to notice, and things to try.




Teaching Notes and Tips

Principles of Microeconomics students are a little puzzled by the simulation at first since the simulation just requires them to press setup, then run, and record data. Thus it becomes important to set the stage before hand and to have them discuss the results in class.

Assessment

Assessment is done through a daily feedback mechanism in the Principles of Microeconomics course.

Class discussion reveals whether the students are confronting the main goal of the simulation.

Other standard forms of assessment can be used.

References and Resources

Netlogo at: http://ccl.northwestern.edu/netlogo/
The Netlogo site provides access to the Netlogo desktop application. The desktop application includes a version of the iterated prisoner's dilemma model which was used as the basis for the modified version referenced above. While not required to run the simulation in a browser, faculty and students wishing to explore the simulation further from within the desktop application.

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