Abstract
This article shows why self-interested agents manage to cooperate in a long-term relationship. When agents interact only once, they often have an incentive to deviate from cooperation. In a repeated interaction, however, any mutually beneficial outcome can be sustained in an equilibrium. This fact, known as the folk theorem, is explained under various information structures. This article also compares repeated games with other means to achieve efficiency, and briefly discusses the scope for potential applications.
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Michihiro, K. (2018). Repeated Games. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1561
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DOI: https://doi.org/10.1057/978-1-349-95189-5_1561
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