Costly Renegotiation in Repeated Bertrand Games
نویسندگان
چکیده
منابع مشابه
Renegotiation in Repeated Games*
In repeated games, subgame-perfect equilibria involving threats of punishment may be implausible if punishing one player hurts the other(s). If players can renegotiate after a defection, such a punishment may not be carried out. We explore a solution concept that recognizes this fact, and show that in many games the prospect of renegotiation strictly limits the cooperative outcomes that can be ...
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The huge multiplicity of equilibria given by the folk theorem motivates an obvious question: whywould players “deliberately” select on equilibria with bad outcomes if “better” equilibria are available? A simple answer to this is that individual rationality (along with the common knowledge of the game and strategic beliefs) does not take us further than equilibrium behavior. In particular, it do...
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We consider repeated games with side-payments: players have an endowment of wealth in each period in which transfers can be made. We show that if endowments are large enough and the common discount factor high enough, then a strongly renegotiation–proof equilibrium (SRP) in the sense of Farrell and Maskin exists. As the discount factor goes to 1, the set of SRP payoffs converges to the set of e...
متن کاملA Note on , , Renegotiation in Repeated Games ” [ Games Econ . Behav .
In Farrell and Maskin (1989), the authors present sufficient conditions for weakly renegotiation-proof payoffs in their Theorem 1 (p. 332). We show that a step in the proof of this theorem is not correct by giving a counterexample. Nevertheless, the sufficient conditions remain true, and we offer a correction of the proof.
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We study repeated games with discounting where perfect monitoring is possible, but costly. It is shown that if players can make public announcements, then every payoff vector which is an interior point in the set of feasible and individually rational payoffs can be implemented in a sequential equilibrium of the repeated game when the discount factor is high enough. Thus, efficiency can be appro...
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ژورنال
عنوان ژورنال: The B.E. Journal of Theoretical Economics
سال: 2010
ISSN: 1935-1704,2194-6124
DOI: 10.2202/1935-1704.1719