Nash Dynamics, Meritocratic Matching, and Cooperation

John F Nash (1950) proposed dynamics for repeated interactions accordingto which agents myopically play individual best-responses against their observationsof other agents’ past play. Such dynamics converge to Nash equilibria. Without suit-able mechanisms, this means that best-response dynamics can lead to low levels ofcooperative behavior and thus to inefficient outcomes in social dilemma games. Here,we discuss the theoretical predictions of these dynamics in a variety of social dilem-mas and assess these in light of behavioral evidence. We particularly focus on “mer-itocratic matching”, a class of mechanisms that leads to both low cooperation (inef-ficient) and high cooperation (near-efficient) equilibria (Gunnthorsdottir et al. 2010;Nax, Murphy, and Helbing 2014; Nax et al. 2015). Most behavioral theories derivedfrom related social dilemmas cannot explain the behavioral evidence for this classof games, but Nash dynamics provide a very satisfactory explanation. We also arguethat Nash dynamics provide a parsimonious account of behavioral results for severaldifferent social dilemmas, with the exception of the linear public goods game