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- Publisher Website: 10.1016/j.geb.2008.11.004
- Scopus: eid_2-s2.0-67651226873
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Article: The optimal degree of cooperation in the repeated Prisoners' Dilemma with side payments
Title | The optimal degree of cooperation in the repeated Prisoners' Dilemma with side payments |
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Authors | |
Keywords | Repeated Prisoners' Dilemma Side payments Differential time preferences Pareto dominant equilibrium payoffs Renegotiation-proofness |
Issue Date | 2009 |
Citation | Games and Economic Behavior, 2009, v. 67, n. 1, p. 277-291 How to Cite? |
Abstract | In the infinitely repeated Prisoners' Dilemma with side payments, we characterize the Pareto frontier of the set of subgame perfect equilibrium payoffs for all possible combinations of discount factors. Play paths implementing Pareto dominant equilibrium payoffs are uniquely determined in all but the first period. Full cooperation does not necessarily implement these payoffs even when it maximizes total stage game payoffs. Rather, when the difference in players' discount factors is sufficiently large, Pareto dominant equilibrium payoffs are implemented by partial cooperation supported by repeated payments from the impatient to the patient player. When both players are sufficiently patient, such payoffs, while implemented via full cooperation, are supported by repeated payments from the impatient to the patient player. We characterize conditions under which public randomization has no impact on the Pareto dominant equilibrium payoffs and conditions under which such payoffs are robust to renegotiation. © 2008 Elsevier Inc. All rights reserved. |
Persistent Identifier | http://hdl.handle.net/10722/269686 |
ISSN | 2023 Impact Factor: 1.0 2023 SCImago Journal Rankings: 1.522 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Fong, Yuk fai | - |
dc.contributor.author | Surti, Jay | - |
dc.date.accessioned | 2019-04-30T01:49:18Z | - |
dc.date.available | 2019-04-30T01:49:18Z | - |
dc.date.issued | 2009 | - |
dc.identifier.citation | Games and Economic Behavior, 2009, v. 67, n. 1, p. 277-291 | - |
dc.identifier.issn | 0899-8256 | - |
dc.identifier.uri | http://hdl.handle.net/10722/269686 | - |
dc.description.abstract | In the infinitely repeated Prisoners' Dilemma with side payments, we characterize the Pareto frontier of the set of subgame perfect equilibrium payoffs for all possible combinations of discount factors. Play paths implementing Pareto dominant equilibrium payoffs are uniquely determined in all but the first period. Full cooperation does not necessarily implement these payoffs even when it maximizes total stage game payoffs. Rather, when the difference in players' discount factors is sufficiently large, Pareto dominant equilibrium payoffs are implemented by partial cooperation supported by repeated payments from the impatient to the patient player. When both players are sufficiently patient, such payoffs, while implemented via full cooperation, are supported by repeated payments from the impatient to the patient player. We characterize conditions under which public randomization has no impact on the Pareto dominant equilibrium payoffs and conditions under which such payoffs are robust to renegotiation. © 2008 Elsevier Inc. All rights reserved. | - |
dc.language | eng | - |
dc.relation.ispartof | Games and Economic Behavior | - |
dc.subject | Repeated Prisoners' Dilemma | - |
dc.subject | Side payments | - |
dc.subject | Differential time preferences | - |
dc.subject | Pareto dominant equilibrium payoffs | - |
dc.subject | Renegotiation-proofness | - |
dc.title | The optimal degree of cooperation in the repeated Prisoners' Dilemma with side payments | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.geb.2008.11.004 | - |
dc.identifier.scopus | eid_2-s2.0-67651226873 | - |
dc.identifier.volume | 67 | - |
dc.identifier.issue | 1 | - |
dc.identifier.spage | 277 | - |
dc.identifier.epage | 291 | - |
dc.identifier.eissn | 1090-2473 | - |
dc.identifier.isi | WOS:000269433100017 | - |
dc.identifier.issnl | 0899-8256 | - |