Evolutionary stability in repeated extensive games played by finite automata

We discuss the emergence of cooperation in repeated Trust Mini-Games played by finite automata. Contrary to a previous result obtained by Piccione and Rubinstein (1993), we first prove that this repeated game admits two Nash equilibria, a cooperative and a non-cooperative one. Second, we show that the cooperative equilibrium is the only (cyclically) stable set under the so-called best response dynamics.