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Incredibility of perfect threats in repeated games: The dilemma of a rational player

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  • Mohr, Ernst

Abstract

The implicit assumption made when deterrence solutions to repeated games are constructed, is that perfectness is a sufficient condition for the credibility of threats. In this paper it is shown that the validity of this assumption hinges on another assumption which proves to be unsatisfactory - namely that players exhibit a different rationality at different stages of the game. A consequence of making rationality independent of time is that sufficient conditions for the credibility of threats fail to exist.

Suggested Citation

  • Mohr, Ernst, 1985. "Incredibility of perfect threats in repeated games: The dilemma of a rational player," Discussion Papers, Series I 202, University of Konstanz, Department of Economics.
    • Handle: RePEc:zbw:kondp1:202
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    References listed on IDEAS

    as
    1. James W. Friedman, 1973. "A Non-cooperative Equilibrium for Supergames: A Correction," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(3), pages 435-435.
    2. Radner, Roy, 1980. "Collusive behavior in noncooperative epsilon-equilibria of oligopolies with long but finite lives," Journal of Economic Theory, Elsevier, vol. 22(2), pages 136-154, April.
    3. Friedman, James W, 1974. "Non-Cooperative Equilibria in Time-Dependent Supergames," Econometrica, Econometric Society, vol. 42(2), pages 221-237, March.
    4. repec:bla:scandj:v:84:y:1982:i:3:p:421-41 is not listed on IDEAS
    5. Rubinstein, Ariel, 1979. "Equilibrium in supergames with the overtaking criterion," Journal of Economic Theory, Elsevier, vol. 21(1), pages 1-9, August.
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