 Solving payoff sets of perfect public equilibria: an exampleChuang Du () MPRA Paper from University Library of Munich, Germany Abstract: We study an example of infinitely repeated games in which symmetric duopolistic firms produce experience goods. After consuming the products, short-run consumers only observe imperfect public information about product quality. We characterize perfect public equilibrium payoff set E(δ) of firms for each fixed discount factor δ∈[0,1) when each firm has two action choices, signals follow binomial distributions and the game has a product structure. The set E(δ) turns out a single point or symmetric pentagon for fixed δ. And δ∈[0, 1) can be divided into countable infinite subintervals in which E(δ) remains constant. The strategies to implement payoffs in boundaries of E(δ) are constructed in a recursive way, in which infinite repetition of Nash Equilibrium of stage game could be viewed as an absorbing state in a Markov Process where state transitions are controlled through public signals and optimal punishments in each period. Keywords: repeated games; imperfect public monitoring; equilibrium payoff sets; duopoly (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:38622 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.