On the Limit Equilibrium Payoff Set in Repeated and Stochastic Games

Johannes Hörner, Satoru Takahashi and Nicolas Vieille ()

No 1848, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: This paper provides a dual characterization of the limit set of perfect public equilibrium payoffs in stochastic games (in particular, repeated games) as the discount factor tends to one. As a first corollary, the folk theorems of Fudenberg, Levine and Maskin (1994), Kandori and Matsushima (1998) and H�rner, Sugaya, Takahashi and Vieille (2011) obtain. As a second corollary, in the context of repeated games, it follows that this limit set of payoffs is a polytope (a bounded polyhedron) when attention is restricted to equilibria in pure strategies. We provide a two-player game in which this limit set is not a polytope when mixed strategies are considered.

Keywords: Stochastic games; Repeated games; Folk theorem (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2012-02
New Economics Papers: this item is included in nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Games and Economic Behavior (May 2014), 85: 70-83

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Related works:
Working Paper: On the Limit Equilibrium Payoff Set in Repeated and Stochastic Games (2012)
Working Paper: On the Limit Equilibrium Payoff Set in Repeated and Stochastic Games (2012)
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