Arbeitspapier

When and How the Punishment Must Fit the Crime

In repeated normal-form (simultaneous-move) games, simple penal codes (Abreu, 1986, 1988) permit an elegant characterization of the set of subgame-perfect outcomes. We show that the logic of simple penal codes fails in repeated extensive-form games. By means of examples, we identify two types of settings in which a subgame-perfect outcome may be supported only by a profile with the property that the continuation play after a deviation is tailored not only to the identity of the deviator, but also to the nature of the deviation.

Language: Englisch

Bibliographic citation: Series: CESifo Working Paper ; No. 5225

Classification: Wirtschaft
Game Theory and Bargaining Theory: General
Noncooperative Games
Stochastic and Dynamic Games; Evolutionary Games; Repeated Games

Subject: simple penal code
subgame perfect equilibrium
repeated extensive game
optimal punishment

Event: Geistige Schöpfung

(who): Mailath, George J.
Nocke, Volker
White, Lucy

Event: Veröffentlichung

(who): Center for Economic Studies and ifo Institute (CESifo)

(where): Munich

(when): 2015

Handle: http://hdl.handle.net/10419/108773

Last update: 10.03.2025, 11:41 AM CET

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Object type

Arbeitspapier

Associated

Mailath, George J.
Nocke, Volker
White, Lucy
Center for Economic Studies and ifo Institute (CESifo)

Time of origin

2015

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Arbeitspapier