Purification in the Infinitely-Repeated Prisoners' Dilemma

V Bhaskar, George Mailath and Stephen Morris

No 1571, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: This paper investigates the Harsanyi (1973)-purifiability of mixed strategies in the repeated prisoners' dilemma with perfect monitoring. We perturb the game so that in each period, a player receives a private payoff shock which is independently and identically distributed across players and periods. We focus on the purifiability of a class of one-period memory mixed strategy equilibria used by Ely and Valimaki (2002) in their study of the repeated prisoners' dilemma with private monitoring. We find that all such strategy profiles are not the limit of one-period memory equilibrium strategy profiles of the perturbed game, for almost all noise distributions. However, if we allow infinite memory strategies in the perturbed game, then any completely-mixed equilibrium is purifiable.

Keywords: Purification; belief-free equilibria; repeated games (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2006-07
New Economics Papers: this item is included in nep-gth
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Published in Review of Economic Dynamics (2008), 11: 515-528

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Related works:
Journal Article: Purification in the Infinitely-Repeated Prisoners' Dilemma (2008)
Working Paper: Purification in the Infinitely-Repeated Prisoners' Dilemma (2007)
Working Paper: Purification in the Infinitely Repeated Prisoner's Dilemma (2006)
Working Paper: Purification in the Infinitely Repeated Prisoners' Dilemma (2004)
Working Paper: Purification in the Infinitely-Repeated Prisoners' Dilemma (2004)
Working Paper: Purification in the Infinitely-Repeated Prisoners’ Dilemma (2004)
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