Breaking the Symmetry: Optimal Conventions in Repeated Symmetric Games

V Bhaskar

Game Theory and Information from EconWPA

Abstract: We analyze the problem of coordinating upon asymmetric equilibria in a symmetric game, such as the battle-of-the-sexes. In repeated interaction, asymmetric coordination is possible possible via symmetric repeated game strategies. This requires that players randomize initially and adopt a convention, i.e a (symmetric) rule which maps asymmetric realizations to asymmetric continuation paths. The multiplicity of possible conventions gives rise to a coordination problem at a higher level if the game is one of pure coordination. However, if there is a slight conflict of interest between players, a unique optimal convention often exists. The optimal convention is egalitarian, and thereby increases the probability of coordination.

Keywords: Coordination; Symmetry; Equilibrium Selection; Repeated Games. (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: Written 1997-06-13
Note: Type of Document - Scientific Word DVI file; prepared on IBM PC; to print on any; pages: 21+; figures: none
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