IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

A “Super” Folk Theorem for dynastic repeated games

  • Luca Anderlini

    ()

  • Dino Gerardi

    ()

  • Roger Lagunoff

    ()

We analyze "dynastic" repeated games. A stage game is repeatedly played by successive generations of finitely-lived players with dynastic preferences. Each individual has preferences that replicate those of the infinitely-lived players of a standard discounted infinitely-repeated game. When all players observe the past history of play, the standard repeated game and the dynastic game are equivalent In our model all players live one period and do not observe the history of play that takes place before their birth, but instead receive a private message from their immediate predecessors. Under very mild conditions, when players are sufficiently patient, all feasible payoff vectors (including those below the minmax of the stage game) can be sustained as a Sequential Equilibrium of the dynastic repeated game with private communication. The result applies to any stage game for which the standard Folk Theorem yields a payoff set with a non-empty interior. We are also able to characterize entirely when a Sequential Equilibrium of the dynastic repeated game can yield a payoff vector not sustainable as a Subgame Perfect Equilibrium of the standard repeated game. For this to be the case it must be that the players' equilibrium beliefs violate a condition that we term "Inter-Generational Agreement."

(This abstract was borrowed from another version of this item.)

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/s00199-007-0293-9
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 & Society for the Advancement of Economic Theory (SAET) in its journal Economic Theory.

Volume (Year): 37 (2008)
Issue (Month): 3 (December)
Pages: 357-394

as
in new window

Handle: RePEc:spr:joecth:v:37:y:2008:i:3:p:357-394
Contact details of provider: Web page: http://www.springer.com

Web page: http://saet.uiowa.edu/

More information through EDIRC

Order Information: Web: http://www.springer.com/economics/economic+theory/journal/199/PS2

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. Farrell, Joseph, 1986. "Meaning and Credibility in Cheap-Talk Games," Department of Economics, Working Paper Series qt4968n3fz, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  2. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 63-80.
  3. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2008. "Communication and Learning," Cowles Foundation Discussion Papers 1639, Cowles Foundation for Research in Economics, Yale University.
  4. 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.
  5. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2008. "A “Super” Folk Theorem for dynastic repeated games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 37(3), pages 357-394, December.
  6. Michihiro Kandori, 1992. "Repeated Games Played by Overlapping Generations of Players," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 81-92.
  7. James Bergin, 2006. "The folk theorem revisited," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(2), pages 321-332, January.
  8. Michihiro Kandori & Hitoshi Matsushima, 1998. "Private Observation, Communication and Collusion," Econometrica, Econometric Society, vol. 66(3), pages 627-652, May.
  9. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2004. "The Folk Theorem in Dynastic Repeated Games," Levine's Bibliography 122247000000000577, UCLA Department of Economics.
  10. Jacques Cremer, 1986. "Cooperation in Ongoing Organizations," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 33-49.
  11. Salant, David J., 1991. "A repeated game with finitely lived overlapping generations of players," Games and Economic Behavior, Elsevier, vol. 3(2), pages 244-259, May.
  12. Rubinstein, Ariel, 1995. "On the Interpretation of Decision Problems with Imperfect Recall," Mathematical Social Sciences, Elsevier, vol. 30(3), pages 324-324, December.
  13. David M Kreps & Robert Wilson, 2003. "Sequential Equilibria," Levine's Working Paper Archive 618897000000000813, David K. Levine.
  14. Olivier Compte, 1998. "Communication in Repeated Games with Imperfect Private Monitoring," Econometrica, Econometric Society, vol. 66(3), pages 597-626, May.
  15. Steven A. Matthews & M. Okuno-Fujiwara & Andrew Postlewaite, 1990. "Refining Cheap-Talk Equilibria," Discussion Papers 892R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  16. Abreu, Dilip & Dutta, Prajit K & Smith, Lones, 1994. "The Folk Theorem for Repeated Games: A NEU Condition," Econometrica, Econometric Society, vol. 62(4), pages 939-48, July.
  17. Johnson, Philip & Levine, David K. & Pesendorfer, Wolfgang, 2001. "Evolution and Information in a Gift-Giving Game," Journal of Economic Theory, Elsevier, vol. 100(1), pages 1-21, September.
  18. Narayana R. Kocherlakota, 1996. "Money is memory," Staff Report 218, Federal Reserve Bank of Minneapolis.
  19. V. Bhaskar, 1998. "Informational Constraints and the Overlapping Generations Model: Folk and Anti-Folk Theorems," Review of Economic Studies, Oxford University Press, vol. 65(1), pages 135-149.
  20. Hajime Kobayashi, 2007. "Folk Theorems For Infinitely Repeated Games Played By Organizations With Short-Lived Members," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 517-549, 05.
  21. Ben-Porath, E. & Kahneman, M., 1993. "Communication in Repeated Games with Private Monitoring," Papers 15-93, Tel Aviv - the Sackler Institute of Economic Studies.
  22. Charalambos D Aliprantis & Gabriele Camera & Daniela Puzzello, 2007. "Contagion Equilibria in a Monetary Model," Econometrica, Econometric Society, vol. 75(1), pages 277-282, 01.
  23. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2007. "Social Memory and Evidence from the Past," Cowles Foundation Discussion Papers 1601, Cowles Foundation for Research in Economics, Yale University.
  24. Schotter, Andrew & Sopher, Barry, 2007. "Advice and behavior in intergenerational ultimatum games: An experimental approach," Games and Economic Behavior, Elsevier, vol. 58(2), pages 365-393, February.
  25. Wallace, Neil, 2001. "Whither Monetary Economics?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 847-69, November.
  26. Andrew Schotter & Barry Sopher, 2003. "Social Learning and Coordination Conventions in Intergenerational Games: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 498-529, June.
  27. Glenn Ellison, 1994. "Cooperation in the Prisoner's Dilemma with Anonymous Random Matching," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 567-588.
  28. Aliprantis, C.D. & Camera, Gabriele & Puzzello, D., 2005. "Anonymous Markets and Monetary Trading," Purdue University Economics Working Papers 1179, Purdue University, Department of Economics.
  29. Mailath, George J. & Samuelson, Larry, 2006. "Repeated Games and Reputations: Long-Run Relationships," OUP Catalogue, Oxford University Press, number 9780195300796, June.
  30. Roger Lagunoff & Akihiko Matsui, 2001. "Organizations and Overlapping Generations Games: Memory, Communication, and Altruism," Working Papers 1, Georgetown University, Department of Economics.
  31. Dean Corbae & Ted Temzelides & Randall Wright, 2002. "Matching and Money," American Economic Review, American Economic Association, vol. 92(2), pages 67-71, May.
  32. Smith, Lones, 1992. "Folk theorems in overlapping generations games," Games and Economic Behavior, Elsevier, vol. 4(3), pages 426-449, July.
  33. Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 23-38.
  34. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2007. "A `Super Folk Theorem' in Dynastic Repeated Games," Levine's Bibliography 321307000000000926, UCLA Department of Economics.
  35. Luca Anderlini & Roger Lagunoff, 2005. "Communication in dynastic repeated games: ‘Whitewashes’ and ‘coverups’," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(2), pages 265-299, 08.
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:spr:joecth:v:37:y:2008:i:3:p:357-394. 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: (Sonal Shukla)

or (Rebekah McClure)

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.