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Published: June 15 2007 10:42 | Last updated: June 15 2007 10:42

Dear Economist,

I am a regular player of Diplomacy, a Risk-type game where several players fight to gain control of the European map. The principle is that two allied players will beat a single player, but, in the end, only one can win - so treason is part of the game.

Can economics suggest a strategy? Maybe quitting the game, due to the time lost in talking through the alliances and intrigues?

Michele, Italy

Dear Michele,

You grumble about the time wasted in playing the game. One thing is certain: there is no way around that. As you know, the successful Diplomacy player needs to be able to form alliances to get ahead in the early stages, before betraying his allies in order to emerge as the ultimate victor. Alliances aren’t binding, so without some sort of trust and co-operation, the game is pointless. Yet, on any given turn, there’s usually a reason to betray your allies.

So how can co-operation emerge? Economists have studied this question carefully using both game theory and the experimental laboratory. Both suggest that co-operation can be sustained when a short-run game is repeated over and over again, even when the short-run game offers strong temptations to the turncoat. This is because the repeated game offers a chance to strike back after any treachery.

There is a catch, though: nobody will co-operate if the game is repeated just a few times, because on the last round everyone will betray everyone else. Reputation is therefore useless on the penultimate round and on the round before that... and so on. Players are much more likely to co-operate only when the final round is a long way off; as a devotee of the world’s most interminable game, you’ll recognise the idea.

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Tim Harford

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Tim Harford

Economics blog: Tim Harford writes ”The Undercover Economist”, about economics in everyday life, and ”Dear Economist”, in which readers’ questions are answered, tongue-in-cheek, with the latest economic theory

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