Gradualism and Irreversibility
AbstractThis paper considers a class of two-player dynamic games in which each player controls a one-dimensional action variable, interpreted as a level of cooperation. The dynamics are due to an irreversibility constraint: neither player can ever reduce his cooperation level. Payoffs are decreasing in one's own action, increasing in one's opponent's action. We characterize efficient symmetric equilibrium action paths; actions rise gradually over time and converge, when payoffs are smooth, to a level strictly below the one-shot efficient level, no matter how little discounting takes place. The analysis is extended to incorporate sequential moves and asymmetric equilibria. Copyright 2002, Wiley-Blackwell.
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Bibliographic InfoArticle provided by Oxford University Press in its journal The Review of Economic Studies.
Volume (Year): 69 (2002)
Issue (Month): 2 ()
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Other versions of this item:
- Lockwood, B. & Thomas, J.P., 1999. "Gradualism and Irreversibility," The Warwick Economics Research Paper Series (TWERPS) 525, University of Warwick, Department of Economics.
- Lockwood, B. & Thomas, J.P., 1999. "Gradualism and Irreversibility," The Warwick Economics Research Paper Series (TWERPS) 550, University of Warwick, Department of Economics.
- Ben Lockwood & Jonathan P. Thomas, 1999. "Gradualism and Irreversibility," Discussion Paper Series, Department of Economics 199909, Department of Economics, University of St. Andrews.
- Ben Lockwood & Jonathan P. Thomas, 1999. "Gradualism and Irreversibility," CSGR Working papers series 28/99, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Fershtman, Chaim & Nitzan, Shmuel, 1991.
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Elsevier, vol. 35(5), pages 1057-1067, July.
- Admati, Anat R & Perry, Motty, 1991. "Joint Projects without Commitment," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 259-76, April.
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