ABSTRACT
Chapter 12 discusses the basic concepts of evolutionary games and cooperation under repeated games can become a type of evolutionarily stable equilibrium. We also analyze the spontaneous evolution of institutions and why social norms like the first-on rule of property rights is respected. In contrast with the previous chapters, this chapter abandons the assumption of complete rationality and assumes that people’s rationality is limited. People’s actions are a process of learning, imitation, and adaption. However, our basic conclusion is the same: Under repeated games, cooperation can appear as the equilibrium result.
