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Seemingly Unrelated Repeated Games

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  • John R. Conlon

    (University of Mississippi)

Abstract

Suppose Player A is playing two apparently independent repeated games with two other people, B and C, with A randomly matched, each period, with either B or C. Each dyad maintains the maximum incentive-compatible level of cooperation within the dyad, even if cooperation has broken down in the other dyad. Thus, if A defects against B, say, then C is still willing to cooperate with A to the maximum incentive-compatible degree. Nevertheless, we show that the simple presence of each cooperative relationship can increase the maximum incentive compatible level of cooperation in the other dyad, due to a counterintuitive circular reasoning or “bootstrapping” effect. With more than two relationships, bootstrapping effects alternate with equally counterintuitive reverse bootstrapping effects.

Suggested Citation

  • John R. Conlon, 2005. "Seemingly Unrelated Repeated Games," Game Theory and Information 0511004, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpga:0511004
    Note: Type of Document - pdf; pages: 28
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/game/papers/0511/0511004.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Repeated Games; Random Matching;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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