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.
ASJC Scopus subject areas
- Economics and Econometrics