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A Remark on Infinitely Repeated Extensive Games

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  • Ariel Rubinstein
  • Asher Wolinsky

Abstract

Let Gamma be a game in extensive form and G be its reduced normal form game. Let Gamma ^infinity (delta) and G^infinity (delta) be the infinitely repeated game version of Gamma and G respectively, with common discount factor delta. This note points out that the set of SPE payoff vectors of Gamma^infinity (delta) might be different from that of G sub infinity (delta), even when delta is arbitrarily close to 1. This difference can be substantial when G fails to satisfy the "dimensionality" condition (a-la Fundenberg and Masking (1986) or Abreu, Dutta and Smith (1992)).

Suggested Citation

  • Ariel Rubinstein & Asher Wolinsky, 1992. "A Remark on Infinitely Repeated Extensive Games," Discussion Papers 989, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:989
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    References listed on IDEAS

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    1. Robert J. Aumann & Lloyd S. Shapley, 2013. "Long Term Competition -- A Game-Theoretic Analysis," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 627-640, November.
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    3. Rubinstein, Ariel, 1986. "Finite automata play the repeated prisoner's dilemma," Journal of Economic Theory, Elsevier, vol. 39(1), pages 83-96, June.
    4. Abreu, D. & Dutta, P., 1991. "The Folk Theorem for Discounted Repeated Games: A New Condition," RCER Working Papers 299, University of Rochester - Center for Economic Research (RCER).
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