One - Memory in Repeated Games

• Autor(a) principal: Barlo, Mehmet
• Data de Publicação: 2006
• Outros Autores: Carmona, Guilherme
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10362/82858
• topic: Repeated Games; Memory; Bounded Rationality; Folk Theorem

We study the extent to which equilibrium payoffs of discounted repeated games can be obtained by 1 – memory strategies. First, we present robust examples of games in which there is a subgame perfect equilibrium payoff profile that cannot be obtained by any 1 – memory subgame perfect equilibrium. Then, a complete characterization of 1 – memory simple strategies is provided, and it is employed to establish the following in games with more than two players each having connected action spaces: 1. all subgame perfect equilibrium payoffs can be approximately supported by an ε – subgame perfect equilibrium strategy of 1 – memory, 2. all strictly enforceable subgame perfect equilibrium payoffs can be approximately supported by a 1 – memory subgame equilibrium, and 3. the subgame perfect Folk Theorem holds for 1 – memory strategies. While no further restrictions are needed for the third result to hold in 2 – player games, an additional restriction is needed for the first two: players must have common punishments.