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Inefficiency in alternately repeated coordination games with dynastic preferences

Author

Listed:
  • Chihiro Morooka

    (Faculty of Economics, The University of Tokyo)

Abstract

This study investigates a specific model of alternately repeated pure coordination games with overlapping generations, where the one-shot game has multiple Pareto-ranked Nash equilibria. We consider the case in which the payoff of each player is affected by the outcome after his retirement as well as the outcome during his participation. Unlike the preceding results on alternately repeated coordination games where only the Pareto-efficient outcome is obtained in equilibria, we show that an inefficient equilibrium arises in our model.

Suggested Citation

  • Chihiro Morooka, 2020. "Inefficiency in alternately repeated coordination games with dynastic preferences," Economics Bulletin, AccessEcon, vol. 40(4), pages 3167-3170.
    • Handle: RePEc:ebl:ecbull:eb-20-01040
    as

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    References listed on IDEAS

    as
    1. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2008. "A “Super” Folk Theorem for dynastic repeated games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 37(3), pages 357-394, December.
    2. Roger Lagunoff & Akihiko Matsui, 1997. "Asynchronous Choice in Repeated Coordination Games," Econometrica, Econometric Society, vol. 65(6), pages 1467-1478, November.
    3. Drew Fudenberg & Eric Maskin, 2008. "The Folk Theorem In Repeated Games With Discounting Or With Incomplete Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 11, pages 209-230, World Scientific Publishing Co. Pte. Ltd..
    4. Dutta, Prajit K., 2012. "Coordination need not be a problem," Games and Economic Behavior, Elsevier, vol. 76(2), pages 519-534.
    5. Morooka, Chihiro, 2019. "Inefficiency in alternately repeated games with overlapping generations," Economics Letters, Elsevier, vol. 184(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Overlapping Generations Games; Alternating Moves; Coordination Games; Dynastic Preferences; Inefficiency.;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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