PERCEPTRONS PLAY THE REPEATED PRISONERS-DILEMMA

We examine the implications of bounded rationality in repeated games by modeling the repeated game strategies as perceptrons (F. Rosenblatt, ''Principles of Neurodynamics,'' Spartan Books, and M. Minsky and S. A. Papert, ''Perceptions: An Introduction to Computational Geometry,'' MIT Press, Cambridge, MA, 1988). In the prisoner's dilemma game, if the cooperation outcome is Pareto efficient, then we can establish the folk theorem by perceptrons with single associative units (Minsky and Papert), whose computational capability barely exceeds what we would expect from players capable of fictitious plays (e.g., L. Shapley, Some topics in two-person games, Adv. Game Theory 5 (1964), 1-28). (C) 1995 Academic Press, Inc.