Monash University
Browse
monash_2201.pdf (2.04 MB)

Achieving Intertemporal Efficiency and Symmetry through Intratemporal Asymmetry: (Eventual) Turn Taking in a Class of Repeated Mixed-Interest Games

Download (2.04 MB)
journal contribution
posted on 2017-06-08, 07:14 authored by Lau, Sau-Him Paul, Mui, Vai-Lam
Turn taking is observed in many field and laboratory settings. We study when and how turn taking can be supported as an equilibrium outcome in a class of repeated games, where the stage game is a symmetric two-player mixed-interest game with asymmehic joint-payoff-maximizing outcomes that may or may not be Nash equilibria. We consider the "turn taking with independent randomizations" (TTIR) strategy that achieves the following three objectives: (a) helping the players get onto a joint-payoff-maximizing turn-taking path, (b) resolving the question of who gets to start with the good turn first, and (c) deterring defection. The TTIR strategy is simpler than those time-varying strategies considered in the Folk Theorem for repeated games. We determine conditions under which a symmetric TTIR subgame-perfect equilibrium exists and is unique. We also derive comparative static results, and study the welfare properties of the TTIR equilibrium.

History

Year of first publication

2004

Series

Department of Economics.

Usage metrics

    Categories

    No categories selected

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC