Renegotiation and Symmetry in Repeated Games

Dilip Abrea, David Pearce, Ennio Stacchetti

    Research output: Contribution to journalArticle

    Abstract

    The paper derives a theory of renegotiation-proofness in symmetric repeated games based on a notion of “equal bargaining power.” According to consistent bargaining equilibrium a player can mount a credible objection to a continuation equilibrium in which he receives a particular expected present discounted value, if there are other self-enforcing agreements that never give any player such a low continuation value after any history. The definition does not imply strongly symmetric solutions. But under modest assumptions, consistent bargaining equilibria of infinitely repeated games with perfect monitoring are strongly symmetric. Such solutions have an unusually elementary characterization. Journal of Economic Literature Classification Numbers: C7, C72.

    Original languageEnglish (US)
    Pages (from-to)217-240
    Number of pages24
    JournalJournal of Economic Theory
    Volume60
    Issue number2
    DOIs
    StatePublished - Aug 1993

    ASJC Scopus subject areas

    • Economics and Econometrics

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