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How much can we identify from repeated games?

Author

Listed:
  • Jose Miguel Abito

    (University of Pennsylvania, Business Economics and Public Policy)

  • Cuicui Chen

    (State University of New York (SUNY) at Albany)

Abstract

We propose a strategy to identify structural parameters in infinitely repeated games without relying on equilibrium selection assumptions. We exploit the extreme points of the equilibrium payoff set to construct bounds on the frequencies of stage game actions, which then impose restrictions on the parameters of interest. To illustrate the identification strategy, we use an infinitely repeated Prisoners Dilemma to get bounds on a utility parameter and a common discount factor.

Suggested Citation

  • Jose Miguel Abito & Cuicui Chen, 2021. "How much can we identify from repeated games?," Economics Bulletin, AccessEcon, vol. 41(3), pages 1212-1222.
    • Handle: RePEc:ebl:ecbull:eb-20-01184
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I3-P102.pdf
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    References listed on IDEAS

    as
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    5. 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..
    6. Dilip Abreu & Benjamin Brooks & Yuliy Sannikov, 2016. "A "Pencil Sharpening" Algorithm for Two Player Stochastic Games with Perfect Monitoring," Working Papers 78_2016, Princeton University, Department of Economics, Econometric Research Program..
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    Cited by:

    1. Abito, Jose Miguel & Knittel, Christopher R. & Metaxoglou, Konstantinos & Trindade, André, 2022. "The role of output reallocation and investment in coordinating environmental markets," International Journal of Industrial Organization, Elsevier, vol. 83(C).
    2. Abito, Jose Miguel & Chen, Cuicui, 2023. "A partial identification framework for dynamic games," International Journal of Industrial Organization, Elsevier, vol. 87(C).

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    More about this item

    Keywords

    Identification; Repeated Games; Bounds; Multiple Equilibria; Subgame Perfect Equilibrium; Dynamic games;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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