Extremal equilibria of oligopolistic supergames

Dilip Abreu

    Research output: Contribution to journalArticle

    Abstract

    General propositions established in Abreu (Ph.D. thesis, Princeton University, October 1983) are applied to the analysis of optimal punishments and constrained Pareto optimal paths of symmetric oligopolistic supergames. A remarkably simple 2-dimensional stick-and-carrot characterization of optimal symmetric punishments is obtained. An analogous result holds for the general case of asymmetric punishments, motivating the study of asymmetric Pareto optimal paths. The latter turn out to have a highly non-stationary dynamic structure which sometimes entails intertemporal reversals of relative payoffs between firms.

    Original languageEnglish (US)
    Pages (from-to)191-225
    Number of pages35
    JournalJournal of Economic Theory
    Volume39
    Issue number1
    DOIs
    StatePublished - Jun 1986

    ASJC Scopus subject areas

    • Economics and Econometrics

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