Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
957569 | Journal of Economic Theory | 2008 | 19 Pages |
Abstract
We study infinitely repeated games with perfect monitoring, where players have ββ–δδ preferences. We compute the continuation payoff set using recursive techniques and then characterize equilibrium payoffs. We then explore the cost of the present-time bias, producing comparative statics. Unless the minimax outcome is a Nash equilibrium of the stage game, the equilibrium payoff set is not monotonic in ββ or δδ. Finally, we show how the equilibrium payoff set is contained in that of a repeated game with smaller discount factor.
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Authors
Hector Chade, Pavlo Prokopovych, Lones Smith,