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On the Incredibility of Perfect Threats in Repeated Games: Note

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  • Mohr, Ernst

Abstract

The deterrence equilibrium concept of an important class of repeated games is shown to suffer from an unsoluble rational ity versus credibility conflict. The implicit assumption made when de terrence solutions to repeated games are constructed is that perfectn ess is a suffi-cient condition for the credibility of threats. The va lidity of this assumption, however, hinges on the unsatisfactory cond ition that players must exhibit a different rationality at different stages of the game. Making rationality stationary implies that suffic ient conditions for the credibility of threats fail to exist. Copyright 1988 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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  • Mohr, Ernst, 1988. "On the Incredibility of Perfect Threats in Repeated Games: Note," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(3), pages 551-555, August.
    • Handle: RePEc:ier:iecrev:v:29:y:1988:i:3:p:551-55
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    Cited by:

    1. Mohr, Ernst, 1987. "A general equilibrium model of sovereign borrowing and non-sovereign financial intermediation," Discussion Papers, Series II 40, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    2. Mohr, Ernst, 1990. "Courts of appeal, bureaucracies and conditional project permits: The role of negotiating non-exclusive property rights over the environment," Kiel Working Papers 408, Kiel Institute for the World Economy (IfW Kiel).
    3. Stähler, Frank, 1996. "Markov perfection and cooperation in repeated games," Kiel Working Papers 760, Kiel Institute for the World Economy (IfW Kiel).
    4. Finus, Michael & Tjotta, Sigve, 2003. "The Oslo Protocol on sulfur reduction: the great leap forward?," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2031-2048, September.
    5. Finus, Michael & Rundshagen, Bianca, 1998. "Toward a Positive Theory of Coalition Formation and Endogenous Instrumental Choice in Global Pollution Control," Public Choice, Springer, vol. 96(1-2), pages 145-186, July.

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