Efficiency and Observability with Long-Run and Short-Run Players
Drew Fudenberg and
David Levine
Chapter 13 in A Long-Run Collaboration on Long-Run Games, 2008, pp 275-307 from World Scientific Publishing Co. Pte. Ltd.
Abstract:
AbstractWe present a general algorithm for computing the limit, as δ → 1, of the set of payoffs of perfect public equilibria of repeated games with long-run and short-run players, allowing for the possibility that the players' actions are not observable by their opponents. We illustrate the algorithm with two economic examples. In a simple partnership we show how to compute the equilibrium payoffs when the folk theorem fails. In an investment game, we show that two competing capitalists subject to moral hazard may both become worse off if their firms are merged and they split the profits from the merger. Finally, we show that with short-run players each long-run player's highest equilibrium payoff is generally greater when their realized actions are observed.
Keywords: Long-Run Players; Limit Games; Robustness; Equilibrium; Reputation Effects; Repeated Games (search for similar items in EconPapers)
JEL-codes: I10 (search for similar items in EconPapers)
Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789812818478_0013 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789812818478_0013 (text/html)
Ebook Access is available upon purchase.
Related works:
Working Paper: Efficiency and Observability with Long-Run and Short-Run Players (1999) 
Journal Article: Efficiency and Observability with Long-Run and Short-Run Players (1994) 
Working Paper: Efficiency and Observability with Long-Run and Short-Run Players (1994) 
Working Paper: Efficiency and Observability with Long-Run and Short-Run Players (1994) 
Working Paper: Efficiency and Obsevability with Long-Run and Short-Run Players (1991)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789812818478_0013
Ordering information: This item can be ordered from
Access Statistics for this chapter
More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().