Tacit Collusion in an Infinitely Repeated Prisoners’ Dilemma
نویسندگان
چکیده
In the context of an infinitely repeated Prisoners’ Dilemma, we explore how cooperation is initiated when players communicate and coordinate through their actions. There are two types of players patient and impatient which are private information. An impatient type is incapable of cooperative play, while if both players are patient types and this is common knowledge then they can cooperate with a grim trigger strategy. We find that the longer that players have gone without cooperating, the lower is the probability that they’ll cooperate in the next period. While the probability of cooperation emerging is always positive, there is a positive probability that cooperation never occurs.
منابع مشابه
Signaling and tacit collusion in an infinitely repeated Prisoners' Dilemma
In the context of an infinitely repeated Prisoners’ Dilemma, we explore how cooperation is initiated when players signal and coordinate through their actions. There are two types of players patient and impatient and a player’s type is private information. An impatient type is incapable of cooperative play, while if both players are patient types and this is common knowledge then they can cooper...
متن کاملMarket Segmentation and Collusive Behavior
The recent literature on oligopolistic third-degree price discrimination has been primarily concerned with rival firms' incentives to acquire customer-specific information and the consequences of such information on firm profitability and welfare. This literature has taken mostly a static view of the interaction between competing firms. In contrast, in this paper we investigate the impact of cu...
متن کاملSequential Equilibria in the Repeated Prisoners’ Dilemma with Private Monitoring
We analyze the infinitely repeated prisoners’ dilemma with imperfect private monitoring. The efficient outome can be approximated in any prisoners’ dilemma game, while every individually rational feasible payoff can be approximated in a class of prisoner dilemma games. Our results require that monitoring be sufficiently accurate but do not require very low discounting.
متن کاملSignaling and Tacit Collusion in an Innitely Repeated PrisonersDilemma
In the context of an in nitely repeated PrisonersDilemma, we explore how cooperation is initiated when players signal and coordinate through their actions. There are two types of players patient and impatient and a players type is private information. An impatient type is incapable of cooperative play, while if both players are patient types and this is common knowledge then they can cooperat...
متن کاملFinitely Repeated Prisoners Dilemma with Small Fines: ’ Penance Contract
We investigate the finitely repeated prisoners’ dilemma with explicit contractual devices. We show that full collusion can be achieved by incentivizing the players’ final period of play with small fines. Our incentivizing modality is the penance contract, by which a player is penalized if (and only if) he deviates from the penance strategy in the final period. We show that using this contractua...
متن کامل