How to Cope with Noise in the Iterated Prisoner's Dilemma

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Abstract
Noise in the form of random errors in implementing a choice is a common problem in real-world interactions. Recent research has identified three approaches to coping with noise: adding generosity to a reciprocating strategy; adding contrition to a reciprocating strategy; and using an entirely different strategy, Pavlov, based on the idea of switching choice whenever the previous payoff was low. Tournament studies, ecological simulation, and theoretical analysis demonstrate (1) a generous version of tit-for-tat is a highly effective strategy when the players it meets have not adapted to noise; (2) if the other players have adapted to noise, a contrite version of tit-for-tat is even more effective at quickly restoring mutual cooperation without the risk of exploitation; and (3) Pavlov is not robust.

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