Game Theory 101 (#60): Tit-for-Tat Isn’t Subgame Perfect

In this lecture, we see that the punishment strategy tit-for-tat attempts to employ in the repeated prisoner’s dilemma is not actually credible. Indeed, if cooperation is so attractive to be worthwhile in the first place, then a player would not want to defect following an opponent’s defection. As a result, tit-for-tat is only a subgame perfect equilibrium for a single value of the discount factor, which is an unrealistic knife-edge condition.