Markov perfection and cooperation in repeated games

Arbeitspapier

Markov perfection has become the usual solution concept to determine the non-cooperative equilibrium in a dynamic game. However, Markov perfection is a stronger solution concept than subgame perfection: Markov perfection rules out any cooperation in a repeated prisoners' dilemma game because the history of previous cooperation does neither change the future action space nor the possible payoffs in this setting. This paper demonstrates that a dynamic modelling approach may sustain cooperation by Markov perfect strategies in situations which are usually modelled as repeated prisoners' dilemma games. The idea is that past defection from cooperation changes a compliance state variable which enters the utility function. The corresponding dynamic games are discussed for the trigger strategy and for a strategy which is weakly renegotiation-proof. Finally, the paper shows that dynamic game modelling improves the chances for strong renegotiation-proofness in the corresponding repeated game.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Year: 1996 ; Kiel: Institut für Weltwirtschaft (IfW)

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Game Theory and Bargaining Theory: General ; Noncooperative Games ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
• Thema: Repeated games ; dynamic games ; Markov perfection ; Folk Theorem ; Spieltheorie ; Gefangenendilemma ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Stähler, Frank
• Ereignis: Veröffentlichung
• (wer): Kiel Institute of World Economics (IfW) ; ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (wo): Kiel
• (wann): 1996

Weitere Informationen

• Handle: http://hdl.handle.net/10419/46946
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ