Purification in the Infinitely-Repeated Prisoners' DilemmaV Bhaskar, George J. Mailath () and Stephen Morris () No 576, Economics Discussion Papers from University of Essex, Department of Economics Abstract: This paper investigates the Harsanyi (1973)-purifiability of mixed strategies in the repeated prisoners' dilemma with perfect monitoring. We perturb the game so that in each period, a player receives a private payoff shock which is independently and identically distributed across players and periods. We focus on the purifiability of a class of one-period memory mixed strategy equilibria used by Ely and Valimaki (2002) in their study of the repeated prisoners' dilemma with private monitoring. We find that the strategy profile is purifiable by perturbed-game finite-memory strategies if and only if it is strongly symmetric, in the sense that after every history, both players play the same mixed action. Thus "most" strategy profiles are not purifiable by finite memory strategies. However, if we allow infinite memory strategies in the perturbed game, then any completely-mixed equilibrium is purifiable. New Economics Papers: this item is included in nep-cdm Downloads: (external link) Related works: Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in Economics Discussion Papers from University of Essex, Department of Economics |
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