The role of a credit system in breaking the iterated Prisoner's Dilemma

The Prisoner's Dilemma illustrates the conflict between individual rational strategies and collective optimality, where choices that maximize individual payoffs often lead to suboptimal outcomes for the group.To address this issue and improve overall efficiency, it is essential to introduce mechanisms that foster cooperation between players.This paper develops a mathematical model that constructs a credit system, enabling rational players to make decisions based on expected payoffs.Under the constraints imposed by this credit system, defection ceases to be the dominant strategy, thereby rendering cooperation a feasible outcome.The proposed credit system demonstrates broad applicability in various settings, including classroom group projects, team competitions, and other collaborative environments, offering a robust mechanism for enhancing cooperation and optimizing collective decision-making.