Abstract
In this chapter we explore agents’ incentives to cooperate when they interact in infinite repetitions of a stage game, such as the Prisoner’s Dilemma game or the Cournot oligopoly game. Repeated interactions between the same group of individuals, or repeated competition between the same group of firms in a given industry, are fairly common.
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Notes
- 1.
You can easily find many other probability weights on T and M that yield an expected utility exceeding the utility from playing strategy B, for any strategy selected by player 2 (i.e., for any column), ultimately allowing you to delete B as being strictly dominated.
- 2.
Note that we do not analyze the case of \( u_{2} (r_{2} ,B) > u_{2} (R,B) \) given that strategy \( s_{1} = B \) was already deleted from the strategy set of player 1.
- 3.
Note that payoff pair (4, 4) is efficient since a movement to another payoff pair, while it benefit one player, reduces the utility level of the other player.
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Munoz-Garcia, F., Toro-Gonzalez, D. (2019). Repeated Games and Correlated Equilibria. In: Strategy and Game Theory. Springer Texts in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-11902-7_6
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DOI: https://doi.org/10.1007/978-3-030-11902-7_6
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