Iterated Game

A game that is played repeatedly between the same participants, creating fundamentally different strategic dynamics than one-shot interactions. In a one-shot prisoner's dilemma, defection is rational; in an iterated version, cooperation becomes viable because today's behavior affects tomorrow's treatment. Reputation, trust, reciprocity, and punishment all become possible when interactions repeat. Axelrod's tournaments showed that tit-for-tat (cooperate first, then mirror your opponent's last move) is remarkably effective in iterated games—nice, retaliatory, forgiving, and clear.

When to use it

When deciding between competitive and cooperative strategies; when evaluating whether to trust a counterparty; when designing business relationships and contracts; when assessing whether reputation effects will constrain bad behavior; when negotiating with parties you'll deal with again versus one-time counterparts.

How it can help

Determine whether your business interactions are one-shot or iterated. With customers, suppliers, and partners you'll interact with repeatedly, cooperative strategies dominate because your reputation carries forward. With one-time transactions, trust must be established through other mechanisms (contracts, escrow, guarantees). The implication: invest in relationships that are iterated and be cautious in one-shot interactions. Convert one-shot games to iterated games when possible (subscription models, long-term contracts, community membership).