Labor Negotiations, Misperceptions, and Repeated Prisoner's Dilemma: Some Extensions and Afterthoughts

Lawrence J. Haber
Nicholas Malin-Adams
Joseph N. Khamalah
Nodir Adilov

---

DOI: 10.2190/CN.32.3.a

Abstract

Extending previous work of three of the authors [3], this study assumes that parties playing tit-for-tat in labor negotiations (modeled as Repeated Prisoner's Dilemma) may have different probabilities of misperceiving one another's moves. Also, the probability of misperceiving a friendly move may be greater than that of misperceiving an unfriendly move. Through simulation, greater perceptive ability by a player is shown to convey no competitive advantage although it may raise joint payoffs. Further, as the probability of misperceiving an unfriendly move as friendly converges to zero, average returns to the players become negligible. These results' behavioral implications are explored.

---

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.