Blackwell Equilibrium in Repeated Games

Costas Cavounidis, Sambuddha Ghosh, Johannes H\"orner, Eilon Solan and Satoru Takahashi

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Abstract: We apply Blackwell optimality to repeated games. An equilibrium whose strategy profile is sequentially rational for all high enough discount factors simultaneously is a Blackwell (subgame-perfect, perfect public, etc.) equilibrium. The bite of this requirement depends on the monitoring structure. Under perfect monitoring, a ``folk'' theorem holds relative to an appropriate notion of minmax. Under imperfect public monitoring, absent a public randomization device, any perfect public equilibrium generically involves pure action profiles or stage-game Nash equilibria only. Under private conditionally independent monitoring, in a class of games that includes the prisoner's dilemma, the stage-game Nash equilibrium is played in every round.

Date: 2025-01
New Economics Papers: this item is included in nep-gth and nep-mic
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