Optimism brings accurate perception in Iterated Prisoner's Dilemma
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We analyze an extended model of the Iterated Prisoner's Dilemma where agents decide to play based on the data from their limited memory or on recommendation. The cooperators can decide whether to play with the matched opponent or not. The decisions of agents are directly linked to their optimism level since they decide to play if they believe the opponent has a high probability to cooperate. Optimism is precisely tuned by parameters named as optimism threshold and tolerance. Our experiment showed that being optimistic is better as it leads to more accurate judgments whereas acting pessimistic results in biased decisions.
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