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Entreprises behavior in cooperative and punishment‘s repeated negotiations

  • Roman, Mihai Daniel

Our paper considers a “negotiation game” between two players which combines the features of two-players alternating offers bargaining and repeated games. Generally, the negotiation game in general admits a large number of equilibriums but some of which involve delay and inefficiency. Thus, complexity and bargaining in tandem may offer an explanation for cooperation and efficiency in repeated games. The Folk Theorem of repeated games is a very used result that shows if players are enough patience then it is possible to obtain a cooperative equilibrium of the infinite repeated game. We proof a new folk theorem for finitely repeated games and also we find new conditions (under stage number and minimum discount factor value) such that players cooperate at least one period in cooperative-punishment repeated games. Finally we present a study-case for Cournot oligopoly situation for n enterprises behavior under finitely and infinitely repeated negotiations. We found for this situation discount factor depends only on players number, not on different player’s payoffs.

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File URL: http://mpra.ub.uni-muenchen.de/37527/1/MPRA_paper_37527.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37527.

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Date of creation: 15 Jul 2008
Date of revision: 05 Jan 2009
Handle: RePEc:pra:mprapa:37527
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  1. Masanao Aoki, 2001. "Modeling Aggregate Behavior and Fluctuations in Economics: Stochastic Views of Interacting Agents," UCLA Economics Online Papers 142, UCLA Department of Economics.
  2. Ariel Rubinstein, 1997. "Finite automata play the repeated prisioners dilemma," Levine's Working Paper Archive 1639, David K. Levine.
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  17. Obara, Ichiro, 2009. "Folk theorem with communication," Journal of Economic Theory, Elsevier, vol. 144(1), pages 120-134, January.
  18. Fong, Yuk-fai & Surti, Jay, 2009. "The optimal degree of cooperation in the repeated Prisoners' Dilemma with side payments," Games and Economic Behavior, Elsevier, vol. 67(1), pages 277-291, September.
  19. Busch, L-A. & Wen, Q., 1991. "Perfect Equilibria in a Negotiation Model," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 9108, University of Western Ontario, The Centre for the Study of International Economic Relations.
  20. Aumann, Robert J, 1985. "An Axiomatization of the Non-transferable Utility Value," Econometrica, Econometric Society, vol. 53(3), pages 599-612, May.
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