An algorithm for two-player repeated games with perfect monitoring

Dilip Abreu () and Yuliy Sannikov ()
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Dilip Abreu: Department of Economics, New York University
Yuliy Sannikov: Princeton University

Theoretical Economics, 2014, vol. 9, issue 2

Abstract: Consider repeated two-player games with perfect monitoring and discounting. We provide an algorithm that computes the set V* of payoff pairs of all pure-strategy subgame perfect equilibria with public randomization. The algorithm provides significant efficiency gains over the existing implementations of the algorithm from Abreu, Pearce and Stacchetti (1990). These efficiency gains arise from a better understanding of the manner in which extreme points of the equilibrium payoff set are generated. An important theoretical implication of our algorithm is that the set of extreme points E of V* is finite. Indeed, |E|

Keywords: Repeated games; perfect monitoring; computation (search for similar items in EconPapers)
JEL-codes: C63 C72 C73 (search for similar items in EconPapers)
Date: 2014-05-16
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Citations: View citations in EconPapers (12)

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