The continuous prisoner's dilemma and the evolution of cooperation through reciprocal altruism with variable investment

Understanding the evolutionary origin and persistence of cooperative behavior is a fundamental biological problem. The standard ‘prisoner's dilemma,’ which is the most widely adopted framework for studying the evolution of cooperation through reciprocal altruism between unrelated individuals, does not allow for varying degrees of cooperation. Here we study the continuous iterated prisoner's dilemma, in which cooperative investments can vary continuously in each round. This game has been previously considered for a class of reactive strategies in which current investments are based on the partner's previous investment. In the standard iterated prisoner's dilemma, such strategies are inferior to strategies that take into account both players' previous moves, as is exemplified by the evolutionary dominance of ‘Pavlov’ over ‘tit for tat.’ Consequently, we extend the analysis of the continuous prisoner's dilemma to a class of strategies in which current investments depend on previous payoffs and, hence, on both players' previous investments. We show, both analytically and by simulation, that payoff-based strategies, which embody the intuitively appealing idea that individuals invest more in cooperative interactions when they profit from these interactions, provide a natural explanation for the gradual evolution of cooperation from an initially noncooperative state and for the maintenance of cooperation thereafter.