Investigating alliance dynamics using a co-evolutionary iterated prisoner’s dilemma with an exit option

Evolutionary games are used in understanding the complex dynamics of real life situations. The iterated prisoner´s dilemma game with exit option was used in modeling strategic alliances. The model was solved as an optimization problem, and several observations were considered as to how partners are behaving in the alliance, and what factors are affecting the alliance´s cooperation level. In this paper we introduce an evolutionary version of the iterated prisoner´s dilemma game with exit option to better understand alliance activity and investigate whether the observations from the mathematical solution continue to hold in the evolutionary environment. The results reveal that in some cases there is a significant difference in the evolutionary dynamics from that predicted by the mathematical solution. The mathematical model was found to be inadequate for alliances which use history information to make their future decisions.