IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Stubbornness, Power, and Equilibrium Selection in Repeated Games with Multiple Equilibria

  • Kjell Hausken

    ()

Axelord’s [(1970), Conflict of Interest, Markham Publishers, Chicago] index of conflict in 2 × 2 games with two pure strategy equilibria has the property that a reduction in the cost of holding out corresponds to an increase in conflict. This article takes the opposite view, arguing that if losing becomes less costly, a player is less likely to gamble to win, which means that conflict will be less frequent. This approach leads to a new power index and a new measure of stubbornness, both anchored in strategic reasoning. The win probability defined as power constitutes an equilibrium refinement which differs from Harsanyi and Selten’s [(1988), A General Theory of Equilibrium Selection in Games, MIT Press, Cambridge] refinement. In contrast, Axelrod’s approach focuses on preferences regarding divergences from imaginary outmost rewards that cannot be obtained jointly. The player who is less powerful in an asymmetric one-shot game becomes more powerful in the repeated game, provided he or she values the future sufficiently more than the opponent. This contrasts with the view that repetition induces cooperation, but conforms with the expectation that a more patient player receives a larger share of the pie. Copyright Springer Science+Business Media, LLC 2007

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10.1007/s11238-006-9020-4
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer in its journal Theory and Decision.

Volume (Year): 62 (2007)
Issue (Month): 2 (March)
Pages: 135-160

as
in new window

Handle: RePEc:kap:theord:v:62:y:2007:i:2:p:135-160
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100341

References listed on IDEAS
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.:

as in new window
  1. Hausken, Kjell, 2005. "The battle of the sexes when the future is important," Economics Letters, Elsevier, vol. 87(1), pages 89-93, April.
  2. Skaperdas, Stergios & Syropoulos, Constantinos, 1996. "Can the shadow of the future harm cooperation?," Journal of Economic Behavior & Organization, Elsevier, vol. 29(3), pages 355-372, May.
  3. Mohr, Matthias & Hausken, Kjell, 1996. "Conflict, interest and strategy: A risk limit approach to conflict," MPIfG Discussion Paper 96/7, Max Planck Institute for the Study of Societies.
  4. repec:cup:cbooks:9780521311830 is not listed on IDEAS
  5. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, June.
  6. R J Johnston, 1978. "On the measurement of power: some reactions to Laver," Environment and Planning A, Pion Ltd, London, vol. 10(8), pages 907-914, August.
  7. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 252, David K. Levine.
  8. Bernard Steunenberg & Dieter Schmidtchen & Christian Koboldt, 1999. "Strategic Power in the European Union," Journal of Theoretical Politics, , vol. 11(3), pages 339-366, July.
  9. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
  10. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September.
  11. Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-54, May.
  12. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  13. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kap:theord:v:62:y:2007:i:2:p:135-160. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.