We study a class of games featuring payoff functions where best reply functions are orthogonal and therefore the pure-strategy non-cooperative solution is attained as a Nash equilibrium in dominant strategies. We prove that the resulting threshold of the discount factor above which implicit collusion on the Pareto frontier is stable in the infinite supergames is independent of the number of players. This holds irrespective of whether punishment is based on infinite Nash reversion or one-shot stick-and-carrot strategy. We outline two examples stemming from economic theory and one from international relations.
Flavio, D., Luca, L. (2018). Folk Theorems for a Class of Additively Separable Games. MATHEMATICAL SOCIAL SCIENCES, 92(1), 10-15 [10.1016/j.mathsocsci.2017.12.004].
Folk Theorems for a Class of Additively Separable Games
Flavio Delbono;Luca Lambertini
2018
Abstract
We study a class of games featuring payoff functions where best reply functions are orthogonal and therefore the pure-strategy non-cooperative solution is attained as a Nash equilibrium in dominant strategies. We prove that the resulting threshold of the discount factor above which implicit collusion on the Pareto frontier is stable in the infinite supergames is independent of the number of players. This holds irrespective of whether punishment is based on infinite Nash reversion or one-shot stick-and-carrot strategy. We outline two examples stemming from economic theory and one from international relations.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.