Q236. In a prisoner’s dilemma game, the rational thing for both players is to defect. This makes mutual defection an equilibrium, though it is not a preferred one (the collective would be better off with another outcome). In other words, in a single game of prisoner’s dilemma, cooperation is “impossible.” But cooperation does happen in the world.
Demonstrate your understanding of Axelrod's ideas by describing the mechanism and conditions under which this can happen without assuming anything “social” about the agents.
Explain how this works and how it adds to or modifies Smith’s and Hayek’s story about how markets can be a source of social order.