L10gametheory

L10gametheory - Lecture10: RepeatedGames KeyTermsinLecture...

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Lecture 10: Repeated Games
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Key Terms in Lecture Stage game Trigger strategies Finitely repeated game Infinitely repeated game
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Repeated Games In many real world settings, players play the same game over and over again the simple constituent game that is played repeatedly is called the stage game Repeated play opens up the possibility of “cooperation” in equilibrium (i.e. playing a strategy different from the NE to the stage game) players can adopt trigger strategies “cooperate” as long as everyone else does once anyone deviates, everyone plays the NE to the stage game forever
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Finitely Repeated Games Recall the Prisoner’s Dilemma : • Suppose the game is played twice (once in period 1 and once in period 2) by the same players. • Suppose both players follow a trigger strategy and each player’s discount rate is 1 (i.e. future utility is just as good as current utility). •Can there exist a NE in which both players play S in both periods?
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L10gametheory - Lecture10: RepeatedGames KeyTermsinLecture...

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