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Stable Agreements in Infinitely Repeated Games

Author

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  • Licun Xue

    (Department of Economics, University of Aarhus, Denmark)

Abstract

This paper studies infinitely repeated games where players can form coalitions to coordinate their actions via self-enforcing agreements. The proposed notion of "stable agreements" extends a characterization of the set of subgame perfect equilibrium paths by Greenberg (1989, 1990) to account for self-enforcing coalitional deviations. An agreement is stable if no coalition can deviate in such a way that by solely coordinating the actions of its own members, it guarantees a higher payoff for each member. Existence of the proposed notion is established and its relation to other notions is investigated.

Suggested Citation

  • Licun Xue, "undated". "Stable Agreements in Infinitely Repeated Games," Economics Working Papers 2000-13, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2000-13
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    File URL: https://repec.econ.au.dk/repec/afn/wp/00/wp00_13.pdf
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    References listed on IDEAS

    as
    1. Asheim, G.B., 1988. "Renegotiation-Proofness In Finite And Infinite Stage Games Through The Theory Of Social Situations," Papers 04-88, Norwegian School of Economics and Business Administration-.
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    7. Asheim, Geir B., 1991. "Extending renegotiation-proofness to infinite horizon games," Games and Economic Behavior, Elsevier, vol. 3(3), pages 278-294, August.
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    9. Abreu, Dilip, 1988. "On the Theory of Infinitely Repeated Games with Discounting," Econometrica, Econometric Society, vol. 56(2), pages 383-396, March.
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    Cited by:

    1. Bo Sandemann Rasmussen, "undated". "Government Debt and Capital Accumulation in the Blanchard-Cass-Yaari OLG Model," Economics Working Papers 2000-14, Department of Economics and Business Economics, Aarhus University.
    2. Boriss Siliverstovs, 2005. "The Bi-parameter Smooth Transition Autoregressive model," Economics Bulletin, AccessEcon, vol. 3(23), pages 1-11.
    3. Effrosyni Diamantoudi, 2003. "Equilibrium binding agreements under diverse behavioral assumptions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(2), pages 431-446, September.
    4. Xiao Luo, 2009. "On the foundation of stability," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 40(2), pages 185-201, August.
    5. Nikolaj Malchow-Moeller & Bo Jellesmark Thorsen, "undated". "Investment under Uncertainty - the Case of Repeated Investment Options," Economics Working Papers 2000-15, Department of Economics and Business Economics, Aarhus University.

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    More about this item

    Keywords

    Repeated games; renegotiation; self-enforcing agreements; coalitions;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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