Krannert School of Management
نویسنده
چکیده
I study two-player undiscounted repeated games with imperfect private monitoring. When strategies are restricted to those implementable by finite automata, fewer equilibrium outcomes are possible. When only two-state automata are allowed, a simple strategy, “Win-Stay, Lose-Shift,” leads to cooperation. WSLS has the nice property that it is able to endogenously recoordinate back to cooperation after an incorrect signal. I show that WSLS is essentially the only equilibrium that leads to cooperation in the infinitely repeated Prisoner’s Dilemma game. In addition, it is also an equilibrium for a wide range of 2 × 2 games. I also give necessary and sufficient conditions on the structure of equilibrium strategies when players can use strategies implementable by finite automata. JEL classification: C62, C72, C73
منابع مشابه
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CERIAS and Department of Computer Sciences, Purdue University, 656 Oval Drive, West Lafayette, Indiana 47907-2086, USA Krannert School of Management, Purdue University, 100 S. Grant St., West Lafayette, Indiana 47907-2076, USA CERIAS and Department of Computer Sciences, Purdue University, 250 N. University St., West Lafayette, Indiana 47907-2066, USA Krannert School of Management, Purdue Univer...
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