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Agility in repeated games: An example

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  • Spiegler, Ran

Abstract

I study a repeated matching-pennies game between players having limited “agility”: when player i decides to switch his action, it takes (geometrically distributed) time for the decision to be implemented. I characterize the unique Nash equilibrium in this game when the papers are sufficiently agile. Players obtain the same equilibrium payoff as in the benchmark game with unlimited agility. However, equilibrium behavior displays endogenous hysteresis, which is more pronounced for less agile players.

Suggested Citation

  • Spiegler, Ran, 2015. "Agility in repeated games: An example," Economics Letters, Elsevier, vol. 131(C), pages 47-49.
    • Handle: RePEc:eee:ecolet:v:131:y:2015:i:c:p:47-49
    DOI: 10.1016/j.econlet.2015.03.026
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    References listed on IDEAS

    as
    1. Fudenberg, Drew & Ishii, Yuhta & Kominers, Scott Duke, 2014. "Delayed-response strategies in repeated games with observation lags," Journal of Economic Theory, Elsevier, vol. 150(C), pages 487-514.
    2. Abreu, Dilip & Rubinstein, Ariel, 1988. "The Structure of Nash Equilibrium in Repeated Games with Finite Automata," Econometrica, Econometric Society, vol. 56(6), pages 1259-1281, November.
    3. Lipman, Barton L. & Wang, Ruqu, 2000. "Switching Costs in Frequently Repeated Games," Journal of Economic Theory, Elsevier, vol. 93(2), pages 149-190, August.
    4. Rubinstein, Ariel, 1986. "Finite automata play the repeated prisoner's dilemma," Journal of Economic Theory, Elsevier, vol. 39(1), pages 83-96, June.
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    Cited by:

    1. Yevgeny Tsodikovich, 2021. "The worst-case payoff in games with stochastic revision opportunities," Annals of Operations Research, Springer, vol. 300(1), pages 205-224, May.

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    JEL classification:

    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other

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