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Achieving Intertemporal Efficiency and Symmetry through Intratemporal Asymmetry: (Eventual) Turn Taking in a Class of Repeated Mixed-Interest Games

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  • Vai-Lam Mui
  • Sau-Him Paul Lau

Abstract

Turn taking is observed in many field and laboratory settings. We study when and how turn taking can be supported as an equilibrium outcome in a class of repeated games, where the stage game is a symmetric two-player mixed-interest game with asymmetric joint-payoff-maximizing outcomes that may or may not be Nash equilibria. We consider the "turn taking with independent randomizations" (TTIR) strategy that achieves the following three objectives: (a) helping the players get onto a joint-payoff-maximizing turn-taking path, (b) resolving the question of who gets to start with the good turn first, and (c) deterring defection. The TTIR strategy is simpler than those time-varying strategies considered in the Folk Theorem for repeated games. We determine conditions under which a symmetric TTIR subgame-perfect equilibrium exists and is unique. We also derive comparative static results, and study the welfare properties of the TTIR equilibrium.

Suggested Citation

  • Vai-Lam Mui & Sau-Him Paul Lau, 2004. "Achieving Intertemporal Efficiency and Symmetry through Intratemporal Asymmetry: (Eventual) Turn Taking in a Class of Repeated Mixed-Interest Games," Econometric Society 2004 Far Eastern Meetings 636, Econometric Society.
    • Handle: RePEc:ecm:feam04:636
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    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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