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Reputation for Playing Mixed Actions: A Characterization Theorem

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  • Harry Pei

Abstract

A patient player privately observes a persistent state that directly affects his myopic opponents' payoffs, and can be one of the several commitment types that plays the same mixed action in every period. I characterize the set of environments under which the patient player obtains at least his commitment payoff in all equilibria regardless of his stage-game payoff function. Due to interdependent values, the patient player cannot guarantee his mixed commitment payoff by imitating the mixed-strategy commitment type, and small perturbations to a pure commitment action can significantly reduce the patient player's guaranteed equilibrium payoff.

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  • Harry Pei, 2020. "Reputation for Playing Mixed Actions: A Characterization Theorem," Papers 2006.16206, arXiv.org, revised Apr 2021.
    • Handle: RePEc:arx:papers:2006.16206
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    References listed on IDEAS

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