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Asynchronous games with transfers: Uniqueness and optimality

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  • Dutta, Prajit K.
  • Siconolfi, Paolo

Abstract

This paper studies asynchronous dynamic games with one period ahead transfers. There is a unique equilibrium that coincides with the Utilitarian Pareto Optimum whenever the horizon is finite. With an infinite horizon, the same result holds when action history dependence is allowed but not history dependence on transfers. The result is restored with a finite but costly memory of transfers as well as with continuous transfer strategies. Multiplicity can arise from strategies that have an infinite memory of transfers. Finally, we provide a full characterization of equilibrium payoffs when players become infinitely patient.

Suggested Citation

  • Dutta, Prajit K. & Siconolfi, Paolo, 2019. "Asynchronous games with transfers: Uniqueness and optimality," Journal of Economic Theory, Elsevier, vol. 183(C), pages 46-75.
    • Handle: RePEc:eee:jetheo:v:183:y:2019:i:c:p:46-75
    DOI: 10.1016/j.jet.2019.05.005
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    More about this item

    Keywords

    Transfers; Asynchronous; Folk Theorem;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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