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Seminar

Equilibrium Selection in Repeated Games with Patient Players

Microeconomics Seminar

Add to calendar 2022-12-06 14:00 2022-12-06 15:15 Europe/Rome Equilibrium Selection in Repeated Games with Patient Players Seminar Room 3rd Floor Villa La Fonte YYYY-MM-DD
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When

06 December 2022

14:00 - 15:15 CET

Where

Seminar Room 3rd Floor

Villa La Fonte

In this seminar, David Pearce (NYU) will present his paper "Equilibrium Selection in Repeated Games with Patient Players."

What determines the path of play in an infinitely repeated game? Typically the players' interests are not perfectly aligned but there is scope for cooperation. Potential surplus could be shared in different ways. The folk theorems of repeated games provide no guidance about the outcome. In the more tractable setting where players can sign binding contracts after any history of play, Abreu and Pearce (2007) show that slight reputational perturbations of the game lead to predictions consistent with Nash bargaining with threats (Nash, 1953). In many settings of interest, such contracts are not available. Nonetheless, combining reputational perturbations with modest continuity and renegotiation conditions in two-person repeated games with patient players again isolates play that is consistent with Nash bargaining with threats.

Co-author: Dilip Abreu

Speaker(s):

Prof David Pearce (New York University)

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