One - Memory in Repeated Games
We study the extent to which equilibrium payo®s of discounted repeated games can be obtained by 1 { memory strategies. First, we present robust examples of games in which there is a subgame perfect equilibrium payo® pro¯le that cannot be obtained by any 1 { memory subgame perfect equilibrium. Then, a complete characterization of 1 { memory simple strategies is provided, and it is employed to establish the following in games with more than two players each having connected action spaces: 1. all subgame perfect equilibrium payo®s can be approximately supported by an " { sub- game perfect equilibrium strategy of 1 { memory, 2. all strictly enforceable subgame perfect equilibrium payo®s can be approximately sup- ported by a 1 { memory subgame equilibrium, and 3. the subgame perfect Folk Theorem holds for 1 { memory strategies. While no further restrictions are needed for the third result to hold in 2 { player games, an additional restriction is needed for the ¯rst two: players must have common punishments.
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| Length: | 49 pages |
| Date of creation: | 2007 |
| Date of revision: | |
| Handle: | RePEc:unl:unlfep:wp500 |
| Contact details of provider: | Postal: Phone: (351) 21 3801638 Fax: (351) 21 3870933 Web page: http://www.fe.unl.ptEmail: More information through EDIRC
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References listed on IDEAS
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FEUNL Working Paper Series
wp449, Universidade Nova de Lisboa, Faculdade de Economia.
- Mehmet Barlo & Guilherme Carmona, 2004. "Time Dependent Bounded Recall Strategies Are Enough to Play the Discounted Repeated Prisoners' Dilemma," Game Theory and Information 0405006, EconWPA.
- Abreu, Dilip, 1988. "On the Theory of Infinitely Repeated Games with Discounting," Econometrica, Econometric Society, vol. 56(2), pages 383-96, March.
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