Tit for Tat

What Is Tit for Tat?

Tit for tat is a game-theory strategy subject to a payoff matrix like that of a prisoner's dilemma. Tit for tat was introduced by Anatol Rapoport, who developed a strategy in which each participant in an iterated prisoner's dilemma follows a course of action consistent with his opponent's previous turn. For example, if provoked, a player subsequently responds with retaliation; if unprovoked, the player cooperates. The tit-for-tat strategy is not exclusive to economics. It is used in many fields, including psychology and sociology. In biology, it is likened to reciprocal altruism.

Understanding Tit for Tat

Tit for tat is a strategy that can be implemented in games with repeated moves or in a series of similar games. The concept revolves around game theory, an economic framework that explains how humans interact with each other in competitive environments. There are two types of game theory: cooperative game theory and uncooperative game theory. Cooperative game theory involves participants negotiating and cooperating to achieve the best outcome. Non-cooperative game theory involves no negotiation or cooperation between opposing parties.

Tit for tat posits that a person is more successful if they cooperate with another person. Implementing a tit-for-tat strategy occurs when one agent cooperates with another agent in the very first interaction and then mimics their subsequent moves. This strategy is based on the concepts of retaliation and altruism. When faced with a dilemma, an individual cooperates when another member has an immediate history of cooperating and defaults when the counterparty previously defaulted.

Example of Tit for Tat

The prisoner's dilemma is a famous economic scenario used to explain the field of social science. It helps show people the balance between cooperation and competition in business, politics, and general social settings.

In the traditional version of the game, two individuals are arrested and presented with a dilemma. If both confess, they each serve five years in jail. If Prisoner One confesses and Prisoner Two does not, Prisoner Two serves seven years and Prisoner One goes free. If both agents do not confess, they each serve three years. The tit-for-tat strategy is to start with cooperation and not confess, assuming the other agent follows suit.

For example, two competing economies can use a tit-for-tat strategy so that both participants benefit. One economy starts with cooperation by not imposing import tariffs on the other economy's goods and services to induce good behavior. The idea is that the second economy responds by also choosing not to impose import tariffs. If the second economy reacts by implementing tariffs, the first economy retaliates by implementing tariffs of its own to discourage the behavior.