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Evolution towards efficient coordination in repeated games, preliminary version

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  • Demichelis, Stefano

Abstract

We show that in long repeated games- or in infinitely repeated games with discount rate close to one- payoffs corresponding to evolutionary stable sets are asymptotically efficient, as intuition suggests. Actions played at the beginning of the game are used as messages that allow players to coordinate on Pareto optimal outcomes in the following stages. Strategies following some simple and intuitive "behavioral maxims" are shown to be able to drive out inefficient ones from a population. The result builds a bridge between the theory of repeated games and that of communication games that will be further investigated.

Suggested Citation

  • Demichelis, Stefano, 2012. "Evolution towards efficient coordination in repeated games, preliminary version," MPRA Paper 39311, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:39311
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    File URL: https://mpra.ub.uni-muenchen.de/39311/2/MPRA_paper_39311.pdf
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    References listed on IDEAS

    as
    1. Binmore,Ken Samuelson,Larry, "undated". "Evolutionary stability in repeated games Played by finite automata," Discussion Paper Serie B 193, University of Bonn, Germany.
    2. Kim, Yong-Gwan & Sobel, Joel, 1995. "An Evolutionary Approach to Pre-play Communication," Econometrica, Econometric Society, vol. 63(5), pages 1181-1193, September.
    3. Mailath, George J. & Samuelson, Larry, 2006. "Repeated Games and Reputations: Long-Run Relationships," OUP Catalogue, Oxford University Press, number 9780195300796.
    4. Demichelis, Stefano & Ritzberger, Klaus, 2003. "From evolutionary to strategic stability," Journal of Economic Theory, Elsevier, vol. 113(1), pages 51-75, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Repeated Games; Evolution; Communication; Efficiency;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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