Equilibrium payoffs in two-player discounted OLG games

Chihiro Morooka ()
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Chihiro Morooka: The University of Tokyo

International Journal of Game Theory, 2021, vol. 50, issue 4, No 11, 1032 pages

Abstract: Abstract This paper studies payoffs in subgame perfect equilibria of two-player discounted overlapping generations games with perfect monitoring. Assuming that mixed strategies are observable and a public randomization device is available, it is shown that sufficiently patient players can obtain any payoffs in the interior of the smallest rectangle containing the feasible and strictly individually rational payoffs of the stage game, when we first choose the rate of discount and then choose the players’ lifespan. Unlike repeated games without overlapping generations, obtaining payoffs outside the feasible set of the stage game does not require unequal discounting.

Keywords: Overlapping generations games; Intertemporal trade; Discounted games; Folk theorem; Rectangular hull (search for similar items in EconPapers)
JEL-codes: C70 C72 C73 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00182-021-00779-9

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