This entry shows why self-interested agents manage to cooperate in a long-term relationship. When agents interact only once, they often have an incentive to deviate from cooperation. In a repeated interaction, however, any mutually beneficial outcome can be sustained in an equilibrium. This fact, known as the folk theorem, is explained under various information structures. This entry also compa...

This paper examines repeatedly implementing a social choice function in a general complete information environment where agents are in…nitely-lived and their preferences are determined stochastically in each period. We …rst demonstrate a necessary role that e¢ ciency plays for repeated implementation. We then establish how any e¢ cient social choice function can be repeatedly implemented in Nas...

This paper presents repeated games with hidden moves, in which players receive imperfect private signals and are able to communicate. We propose a conditional probability approach to solve the learning problem in repeated games with correlated private signals and delayed communication. We then apply this approach to symmetric n-player games to obtain an approximate efficiency result. © 2007 Els...

This paper considers equilibrium in transaction mechanisms. In an environment with homogeneous buyers and sellers, which eliminates the advantage auctions possess of matching buyers and sellers, both auctions and bargaining are equilibria. However, only auctions are evolutionarily stable. This identifies a new advantage of auctions over bargaining, arising from the division of the gains from tr...

This paper is a note on how Information Theory and Codification Theory are helpful in the computational design both of communication protocols and strategy sets in the framework of finitely repeated games played by boundedly rational agents. More precisely, we show the usefulness of both theories to improve the existing automata bounds of Neyman’s (1998) work on finitely repeated games played b...

Consider a two-period situation. In the first period a consumer and a firm bargain over the price of a bond. The objective is a project which takes one period to come on stream. Both agents prefer production but the consumer is less patient than the firm. The outcome is underproduction. A condition for the intervention of a bank exists. It is shown that intermediation is unstable. The potential...

Cooperation can increase the efficiency of commonly–owned renewable resource use. However, received knowledge is that, absent side payments, cooperative solutions are more difficult to achieve the less homogenous the agents involved. We revisit this claim by analyzing how differences in the opportunity costs of resource harvesting affect the scope for Pareto–improving contracts, where contracti...

Identity elements of tRNA(Thr) towards Saccharomyces cerevisiae threonyl-tRNA synthetase were examined using in vitro transcripts. By mutation studies, a marked decrease in aminoacylation with threonine showed that the first base pair in the acceptor stem and the second and third positions of the anticodon are major identity elements of tRNA(Thr), which are essentially the same as those of Esch...