Efficiency in evolutionary games: Darwin, Nash and the secret handshake

Area of Science:

• Evolutionary game theory
• Behavioral economics
• Game theory

Background:

• Evolutionarily stable strategies (ESSs) can lead to inefficient outcomes when multiple strategies exist with differing payoffs.
• A costless signaling mechanism can be introduced to alter the dynamics of evolutionary games.

Purpose of the Study:

• To analyze the impact of a signaling mutant on games with multiple ESSs.
• To investigate the conditions under which cooperation can evolve in evolutionary games.

Main Methods:

• Introduction of a mutant with a costless signal that conditions on opponent signaling.
• Analysis of the mutant's strategy against both non-signaling and signaling populations.
• Illustration using coordination games and prisoner's dilemma (one-shot and repeated).

Main Results:

• The signaling mutant can destabilize inefficient ESSs by outcompeting non-signaling populations.
• The mutant can achieve more efficient ESSs against other signaling mutants.
• Superior outcomes not induced by ESSs can be temporarily attained in one-shot games.
• Cooperation becomes inevitable in the repeated prisoner's dilemma.

Conclusions:

• Signaling mutants can drive evolutionary games towards more efficient equilibria.
• The evolution of cooperation is facilitated and potentially guaranteed in repeated interactions through signaling mechanisms.