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Reputation and Experimentation in Repeated Games with Two Long-Run Players

Author

Listed:
  • Robert Evans
  • Jonathan P. Thomas

Abstract

The authors consider a repeated game between two long-run players, one of whom is relatively patient. Each player has a small amount of uncertainty about the other's strategy. Given a weak assumption about the support of this uncertainty, the more patient player obtains (in any Nash equilibrium) approximately the highest payoff consistent with the individual rationality of the other player, if the latter is patient enough. If the less patient player is relatively impatient, any Nash equilibrium gives the more patient player at least the Stackelberg payoff: this generalizes K. M. Schmidt's (1993) result, which applies only to games of conflicting interests.

Suggested Citation

  • Robert Evans & Jonathan P. Thomas, 1997. "Reputation and Experimentation in Repeated Games with Two Long-Run Players," Econometrica, Econometric Society, vol. 65(5), pages 1153-1174, September.
    • Handle: RePEc:ecm:emetrp:v:65:y:1997:i:5:p:1153-1174
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    Citations

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    Cited by:

    1. Chantal Marlats, 2021. "Reputation effects in stochastic games with two long-lived players," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 1-31, February.
    2. Atakan, Alp E. & Ekmekci, Mehmet, 2015. "Reputation in the long-run with imperfect monitoring," Journal of Economic Theory, Elsevier, vol. 157(C), pages 553-605.
    3. Rainer Nitsche, 2000. "Incentives to Grow: Multimarket Firms and Predation," CIG Working Papers FS IV 00-19, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    4. Harry Pei, 2020. "Reputation Building under Observational Learning," Papers 2006.08068, arXiv.org, revised Nov 2020.
    5. Sorin, Sylvain, 1999. "Merging, Reputation, and Repeated Games with Incomplete Information," Games and Economic Behavior, Elsevier, vol. 29(1-2), pages 274-308, October.
    6. Katharina Holzinger & Jale Tosun, 2019. "Why differentiated integration is such a common practice in Europe: A rational explanation," Journal of Theoretical Politics, , vol. 31(4), pages 642-659, October.
    7. Shota Fujishima, 2015. "The emergence of cooperation through leadership," International Journal of Game Theory, Springer;Game Theory Society, vol. 44(1), pages 17-36, February.
    8. Yunjian Xu & Katrina Ligett, 2018. "Commitment in first-price auctions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(2), pages 449-489, August.
    9. Peter Burton & Shelley Phipps & Lori Curtis, 2002. "All in the Family: A Simultaneous Model of Parenting Style and Child Conduct," American Economic Review, American Economic Association, vol. 92(2), pages 368-372, May.
    10. Ehud Lehrer & Leeat Yariv, 1999. "Repeated Games with Incomplete Information on One Side: The Case of Different Discount Factors," Mathematics of Operations Research, INFORMS, vol. 24(1), pages 204-218, February.
    11. Gagen, Michael, 2013. "Isomorphic Strategy Spaces in Game Theory," MPRA Paper 46176, University Library of Munich, Germany.
    12. Lu, Yang K., 2013. "Optimal policy with credibility concerns," Journal of Economic Theory, Elsevier, vol. 148(5), pages 2007-2032.
    13. Harry Pei, 2020. "Reputation for Playing Mixed Actions: A Characterization Theorem," Papers 2006.16206, arXiv.org, revised Apr 2021.
    14. Sandroni, Alvaro, 2000. "Reciprocity and Cooperation in Repeated Coordination Games: The Principled-Player Approach," Games and Economic Behavior, Elsevier, vol. 32(2), pages 157-182, August.
    15. Atakan, Alp Enver & Ekmekci, Mehmet, 2014. "Reputation in Repeated Moral Hazard Games," MPRA Paper 54427, University Library of Munich, Germany.
    16. Wolitzky, Alexander, 2011. "Indeterminacy of reputation effects in repeated games with contracts," Games and Economic Behavior, Elsevier, vol. 73(2), pages 595-607.
    17. Joyee Deb & Yuhta Ishii, 2016. "Reputation Building under Uncertain Monitoring," Cowles Foundation Discussion Papers 2042, Cowles Foundation for Research in Economics, Yale University.

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