Strategic Control of Myopic Best Reply in Repeated Games

Burkhard Schipper

No 284, Working Papers from University of California, Davis, Department of Economics

Abstract: How can a rational player strategically control a myopic best reply player in a repeated two-player game? We show that in games with strategic substitutes or strategic complements the optimal control strategy is monotone in the initial action of the opponent, in time periods, and in the discount rate. As an interesting example outside this class of games we present a repeated "textbook-like" Cournot duopoly with non-negative prices and show that the optimal control strategy involves a cycle.

Keywords: Strategic teaching; learning; adaptive heuristics; dynamic optimization; strategic substitutes; strategic complements; myopic players (search for similar items in EconPapers)
JEL-codes: C70 C72 (search for similar items in EconPapers)
Pages: 24
Date: 2011-04-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Strategic control of myopic best reply in repeated games (2011)
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