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A Remark on Infinitely Repeated Extensive Games

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  • Rubinstein, Ariel
  • Wolinsky, Asher

Abstract

The comment demonstrates several examples of extensive games for which the set of subgame perfect equilibrium payoff vectors of its repeated game with discounting is very different than that of the corresponding repeated reduced normal form game even when the discount factor is close to 1. Nevertheless, it is true that with a "dimensionality" condition (ala Fudenberg and Maskin (1986), or, Abreu and Dutta (1991) all feasible and strictly individually rational payoff vectors are subgame perfect equilibrium payoff vectors where the discount rate approaches the unity.

Suggested Citation

  • Rubinstein, Ariel & Wolinsky, Asher, 1992. "A Remark on Infinitely Repeated Extensive Games," Foerder Institute for Economic Research Working Papers 275557, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275557
    DOI: 10.22004/ag.econ.275557
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    1. Robert J. Aumann & Lloyd S. Shapley, 2013. "Long Term Competition -- A Game-Theoretic Analysis," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 627-640, November.
    2. Abreu, Dilip & Rubinstein, Ariel, 1988. "The Structure of Nash Equilibrium in Repeated Games with Finite Automata," Econometrica, Econometric Society, vol. 56(6), pages 1259-1281, November.
    3. Rubinstein, Ariel, 1986. "Finite automata play the repeated prisoner's dilemma," Journal of Economic Theory, Elsevier, vol. 39(1), pages 83-96, June.
    4. Abreu, D. & Dutta, P., 1991. "The Folk Theorem for Discounted Repeated Games: A New Condition," RCER Working Papers 299, University of Rochester - Center for Economic Research (RCER).
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