Cooperation, secret handshakes, and imitation in the prisoners' dilemma

Building on A. J. Robson (1990, J. Theoret. Biol. 144, 379-396), we introdu ce into the repeated prisoners' dilemma mutants who have the ability to sen d a (costly) signal, i.e., the "secret handshake," before each round of the game and to condition their actions on whether or not they observe the sam e signal from their opponent. We show that as mutation probabilities approa ch zero in the limit, cooperation occurs a positive fraction of the time. U sing simulations to study the behavior of the system with nonzero mutation probabilities, we obtain similar results. Surprisingly, in some cases an in creased payoff to unilateral defection actually raises the level of coopera tion. (C) 2001 Academic Press.