Reputation for Honesty in Repeated Games with One Long Run Player

Christian Schultz ()

No 94-05, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: This paper studies reputation for honesty in a repeated game with one long run player facing a sequence of short run players. The long run player announces which actions he will take in the future. The long run player has several types, for some but not all it costs payoff not to follow the announcement. Only when trembles are introduced in the announcements does the possibility to build a reputation for being honest restrict the set of Perfect Bayesian equilibria. In this case a sufficiently patient long run player almost gets his Stackelberg payoff in all Perfect Bayesian equilibria.

Pages: 13 pages
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:9405

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