A strong anti-folk theorem

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2 Citations (Scopus)

Abstract

We study the properties of finitely complex, symmetric, globally stable, and semi-perfect equilibria. We show that: (1) If a strategy satisfies these properties then players play a Nash equilibrium of the stage game in every period; (2) The set of finitely complex, symmetric, globally stable, semi-perfect equilibrium payoffs in the repeated game equals the set of Nash equilibria payoffs in the stage game; and (3) A strategy vector satisfies these properties in a Pareto optimal way if and only if players play some Pareto optimal Nash equilibrium of the stage game in every stage. Our second main result is a strong anti-Folk Theorem, since, in contrast to what is described by the Folk Theorem, the set of equilibrium payoffs does not expand when the game is repeated.

Original languageEnglish
Pages (from-to)131-151
Number of pages21
JournalInternational Journal of Game Theory
Volume34
Issue number1
DOIs
Publication statusPublished - 1 Apr 2006

Keywords

  • Complexity
  • Nash equilibrium
  • Social institutions
  • Stability

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