Repeated game lecture notes Flashcards
What is a Nash Equilbrium?
A state in which neither player can improve their payoff by picking a different strategy
What is a repeated game?
When a one shot game is played successively T>1 times
What is the assumption regarding history in repeated games?
During repeated games, it is assumed that the players observe and remember what happened in previous repetitions of the game
In the context of repeated games, why are some strategies very complex?
Because the strategy may have to describe choices for all possible game histories
If there is a unique Nash Equilibrium in a stage game, what can we assume about the infinite version?
We can assume that this will be the strategy observed in every repetition of the game
Under what circumstance is cooperation more likely to be sustained?
Cooperation is more likely to be sustained if the game itself is sufficiently likely to continue
When firms collude, why do they do it?
To maximise joint payoffs
