Does Capitalism Need a Government to Be Nice: Robert Axelrod and His Iterated Prisoner’s Dilemma Computer Tournament

Abstract

In the past few decades, the progressive political ideal of strong central governments or collective morality being necessary to enforce cooperative behavior has become widely-accepted. However, many philosophers throughout history, especially that from the classical liberalism tradition, have espoused free market, open society ideals arguing not only that governments are the source of much of the immorality and conflict many are afraid of, but also that man left in a free environment can and will cooperate and develop naturally moral systems that allow for economic and societal development. Robert Axelrod, more recently, studied this debate using the famous Prisoner’s Dilemma (PD) game from traditional game theory and applied computer science to find that, indeed, cooperation can arise naturally even between selfish prisoners. This paper develops the study further by examining more realistic situations of PD games involving multiple players, using computer simulations, i.e. agent-based modeling, and finds that Axelrod’s original conclusions hold true.