> But I would still predict that there are some situations where the bad actor population is so large and "mildly-bad" that indefinitely giving in to their implicit demands is the right game theoretic choice.
Game theory is quite a big thing, that's for sure. And it's no surprise that actors will tend towards these situations where you're tempted to think "eh, letting them do this bad thing with impunity feels like the right game theoretic choice, because it's right at the limit of not being bad enough to illicit a response." And yet, there's a reason for things like territorial behavior in the animal kingdom, where an animal will defend minor territory disputes at great personal cost even when the cost of losing a small amount of territory seems much smaller.
Game theory is quite a big thing, that's for sure. And it's no surprise that actors will tend towards these situations where you're tempted to think "eh, letting them do this bad thing with impunity feels like the right game theoretic choice, because it's right at the limit of not being bad enough to illicit a response." And yet, there's a reason for things like territorial behavior in the animal kingdom, where an animal will defend minor territory disputes at great personal cost even when the cost of losing a small amount of territory seems much smaller.