TY - JOUR
T1 - Internally Renegotiation-Proof Equilibrium Sets
T2 - Limit Behavior with Low Discounting
AU - Ray, Debraj
PY - 1994/1
Y1 - 1994/1
N2 - Recent literature in the theory of games addresses the criticism that efficient outcomes in a dynamic game are often supported by punishment paths that do not have the same efficiency property. The outcome of this research is the notion of renegotiation-proof equilibria. In this paper, I analyze the notion of renegotiation-proof equilibrium sets that satisfy a natural criterion of internal consistency, one that the earlier notions do not satisfy. I analyze the limit points of such sets as discounting vanishes. The main result states that such limit sets must either be singletons or belong to the Pareto frontier of the convex hull of the feasible set of stage game payoffs. Journal of Economic Literature Classification Number: 026.
AB - Recent literature in the theory of games addresses the criticism that efficient outcomes in a dynamic game are often supported by punishment paths that do not have the same efficiency property. The outcome of this research is the notion of renegotiation-proof equilibria. In this paper, I analyze the notion of renegotiation-proof equilibrium sets that satisfy a natural criterion of internal consistency, one that the earlier notions do not satisfy. I analyze the limit points of such sets as discounting vanishes. The main result states that such limit sets must either be singletons or belong to the Pareto frontier of the convex hull of the feasible set of stage game payoffs. Journal of Economic Literature Classification Number: 026.
UR - http://www.scopus.com/inward/record.url?scp=38149145866&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=38149145866&partnerID=8YFLogxK
U2 - 10.1006/game.1994.1009
DO - 10.1006/game.1994.1009
M3 - Article
AN - SCOPUS:38149145866
SN - 0899-8256
VL - 6
SP - 162
EP - 177
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 1
ER -