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Linking of Repeated Games. When Does It Lead to More Cooperation and Pareto Improvements?

Author

Listed:
  • Pierre von Mouche

    (Wageningen Universiteit)

  • Henk Folmer

    (Wageningen Universiteit and Rijksuniversiteit Groning)

Abstract

Linking of repeated games and exchange of concessions in fields of relative strength may lead to more cooperation and to Pareto improvements relative to the situation where each game is played separately. In this paper we formalize these statements, provide some general results concerning the conditions for more cooperation and Pareto improvements to materialize or not and analyze the relation between both. Special attention is paid to the role of asymmetries.

Suggested Citation

  • Pierre von Mouche & Henk Folmer, 2007. "Linking of Repeated Games. When Does It Lead to More Cooperation and Pareto Improvements?," Working Papers 2007.60, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2007.60
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    References listed on IDEAS

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    1. Michael Finus & Alejandro Caparrós (ed.), 2015. "Game Theory and International Environmental Cooperation," Books, Edward Elgar Publishing, number 15345.
    2. Just, Richard E. & Netanyahu, Sinaia, 2000. "The importance of structure in linking games," Agricultural Economics, Blackwell, vol. 24(1), pages 87-100, December.
    3. Jean-Pierre Benoît & Vijay Krishna, 1996. "The Folk Theorems for Repeated Games - A Synthesis," Discussion Papers 96-03, University of Copenhagen. Department of Economics.
    4. Spagnolo, Giancarlo, 1999. "On Interdependent Supergames: Multimarket Contact, Concavity, and Collusion," Journal of Economic Theory, Elsevier, vol. 89(1), pages 127-139, November.
    5. Nick Hanley & Henk Folmer (ed.), 1998. "Game Theory and the Environment," Books, Edward Elgar Publishing, number 1083.
    6. B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring.
    7. Henk Folmer & Pierre Mouche & Shannon Ragland, 1993. "Interconnected games and international environmental problems," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 3(4), pages 313-335, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Environmental Policy; Linking; Folk Theorem; Tensor Game; Prsioners' Dilemma; Full Cooperation; Pareto Efficiency; Minkowski Sum; Vector Maximum; Convex Analysis;
    All these keywords.

    JEL classification:

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

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