Reputation and Equilibrium Characterization in Repeated Games with Conflicting Interests
AbstractA two-person game is of conflicting interests if the strategy to which player one would most like to commit herself holds player two down to his minimax payoff. Suppose there is a positive prior probability that player one is a "commitme nt type" who will always play this strategy. Then player one will get a t least her commitment payoff in any Nash equilibrium of the repeated game if her discount factor approaches one. This result is robust against further perturbations of the informational structure and in striking contrast to the message of the Folk theorem for games with incomplete information. Copyright 1993 by The Econometric Society.
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Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 3395.
Date of creation: 1993
Date of revision:
Publication status: Published in Econometrica 61(1993): pp. 325-351
Other versions of this item:
- Schmidt, Klaus M, 1993. "Reputation and Equilibrium Characterization in Repeated Games with Conflicting Interests," Econometrica, Econometric Society, vol. 61(2), pages 325-51, March.
- Schmidt, K.M., 1992. "Reputation and Equilibrium Characterization in Repeated Games with Conflicting Interests," Working papers 92-7, Massachusetts Institute of Technology (MIT), Department of Economics.
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