We consider a discrete-time dynamic game in which a finite number of players extract a non-renewable resource and derive consumption solely from the extracted amount (cake-eating game). Markov-perfect Nash equilibria can be constructed in this game not only if the players have time-preference factors that are smaller than 1, but also if these factors are equal to or even larger than 1. We demon...

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...

This paper rigorously justifies the approximation of aggregate imitational behavior in large populations by the deterministic dynamics given by Bjönerstedt and Weibull. We first clarify what models fit their formulation, in which the stochastic dynamics depends only on the average frequencies of strategies in populations. Then we show that the stochastic process of each individual’s behavior co...

In the reputation literature, players have commitment types which represent the possibility that they do not have standard payoffs but instead are constrained to follow a particular plan. In this paper, we show that arbitrary commitment types can emerge from incomplete information about the stage payoffs. In particular, any finitely repeated game with commitment types is strategically equivalen...

We show on a 4 × 4 example that many dynamics may eliminate all strategies used in correlated equilibria, and this for an open set of games. This holds for the best-response dynamics, the Brown-von Neumann-Nash dynamics and any monotonic or weakly sign-preserving dynamics satisfying some standard regularity conditions. For the replicator dynamics and the best-response dynamics, elimination of a...

We study the impact of strategic commitment on cooperation in indefinitely repeated games of strategic substitutes (Cournot) and complements (Bertrand) using laboratory experiments. Overall, strategic commitment has no effect on cooperation with strategic substitutes and a negative one with strategic complements. In the absence of strong strategic commitment, we find more cooperation in the com...

This paper shows that every finite game of weak strategic complementarities is a nested pseudo-potential game if the action set of one player is multi-dimensional and the action sets of the others are one-dimensional; the implication does not hold, however, if the action sets of more than two players are multi-dimensional. Moreover, the paper proposes a new class of games of nested strategic co...

In this paper, we develop a model of collusion in which two firms play an infinitelyrepeated Bertrand game when each firm has a privately-informed agent. The colluding firms, fixing prices, allocate market shares based on the agent’s information as to cost types. We emphasize that the presence of privately-informed agents may provide firms with a strategic opportunity to exploit an interaction ...

The winner-take-all nature of all-pay auctions makes the outcome sensitive to decision errors, which we introduce with a logit formulation. The equilibrium bid distribution is a fixed point: the belief distributions that determine expected payoffs equal the choice distributions determined by expected payoffs. We prove existence, uniqueness, and symmetry properties. In contrast to the Nash equil...

Stochastic best response models provide sharp predictions about equilibrium selection when the noise level is arbitrarily small. The difficulty is that, when the noise is extremely small, it can take an extremely long time for a large population to reach the stochastically stable equilibrium. An important exception arises when players interact locally in small close-knit groups; in this case co...