[hmkpoker]

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Technically speaking, some versions of the IPD have multiple equilibria. Both players always defecting is always an equilibrium. In cases where the game is infinitely or indefinitely repeated, cooperation becomes an equilibrium.

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When repetition is introduced, defection ceases to be pareto-optimal and cooperation becomes pareto-optimal; it just requires a little more planning than the the usual "one-step," single iteration moves that game theory likes to concern itself with.

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I think youre misstating something. Without iteration, PD defection is the NE but it is pareto-suboptimal. Cooperation is pareto-optimal without iteration because at least one participant is as well off as he can be (in fact both are) and no one can improve his position (or is the condition weaker than that?)

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You're right, my mistake.