TY - JOUR
T1 - Collective dynamic consistency in repeated games
AU - Douglas Bernheim, B.
AU - Ray, Debraj
N1 - Funding Information:
* This work was supported by the National Science Foundation Grant SES-8404164 at the Institute for Mathematical Studies in the Social Sciences, Stanford University. We are also grateful for partial support from the Warshow endowment of Cornell University. We would like to thank Eric van Damme and Geir Asheim for helpful comments.
PY - 1989/12
Y1 - 1989/12
N2 - We formalize the notion of collective dynamic consistency for noncooperative repeated games. Intuitively, we require that an equilibrium not prescribe any course of action in any subgame that players would jointly wish to renegotiate, given the restriction that any alternative must itself be invulnerable to subsequent deviations and renegotiation. While the appropriate definition of collective dynamic consistency is clear for finitely repeated games, serious conceptual difficulties arise when games are repeated infinitely. We investigate several alternative solution concepts, and establish existence (under reasonably general conditions) for each.
AB - We formalize the notion of collective dynamic consistency for noncooperative repeated games. Intuitively, we require that an equilibrium not prescribe any course of action in any subgame that players would jointly wish to renegotiate, given the restriction that any alternative must itself be invulnerable to subsequent deviations and renegotiation. While the appropriate definition of collective dynamic consistency is clear for finitely repeated games, serious conceptual difficulties arise when games are repeated infinitely. We investigate several alternative solution concepts, and establish existence (under reasonably general conditions) for each.
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U2 - 10.1016/0899-8256(89)90020-1
DO - 10.1016/0899-8256(89)90020-1
M3 - Article
AN - SCOPUS:0000429880
SN - 0899-8256
VL - 1
SP - 295
EP - 326
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 4
ER -