Repeated Games with General Discounting

Ichiro Obara and Jaeok Park
Additional contact information
Jaeok Park: Yonsei University

No 2015rwp-84, Working papers from Yonsei University, Yonsei Economics Research Institute

Abstract: We introduce a general class of time discounting, which includes time-inconsistent ones, into repeated games with perfect monitoring. A strategy pro le is called an agent subgame perfect equilibrium if there is no pro table one-shot deviation at any history. We characterize strongly symmetric agent subgame perfect equilibria for repeated games with symmetric stage game. We nd that the harshest punishment takes different forms given different biases. When players are future biased, the harshest punishment is supported by a version of stick-and-carrot strategy. When players are present biased, the harshest punishment may take a more complex form. In particular, the worst punishment path may need to be cyclical. We also nd that the worst punishment payoff is different from the stage game minmax payoff even when players are patient. For some class of discounting, we show that the worst punishment payoff is larger than the stage game minmax payoff with present bias and smaller than the stage game minmax payo with future bias. We also characterize the set of limit equilibrium payoffs as the length of periods converges to 0, without changing the intertemporal structure of biases.

Keywords: Hyperbolic Discounting; Present Bias; Repeated Game; Time Inconsistency (search for similar items in EconPapers)
JEL-codes: C73 D03 (search for similar items in EconPapers)
Pages: 41pages
Date: 2015-10
New Economics Papers: this item is included in nep-gth, nep-hpe and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://121.254.254.220/repec/yon/wpaper/2015rwp-84.pdf (application/pdf)

Related works:
Journal Article: Repeated games with general discounting (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:yon:wpaper:2015rwp-84

Access Statistics for this paper

More papers in Working papers from Yonsei University, Yonsei Economics Research Institute Contact information at EDIRC.
Bibliographic data for series maintained by YERI ().