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Purification in the Infinitely-Repeated Prisoners’ Dilemma, Second Version

V Bhaskar, George Mailath and Stephen Morris

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

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 one-period memory mixed strategy equilibria used by Ely and Välimäki (2002) in their study of the repeated prisoners’ dilemma with private monitoring. We find that any such strategy profile is 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: 23 pages
Date: 2006-07-13, Revised 2007-08-20
New Economics Papers: this item is included in nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:07-024

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