TY - JOUR
T1 - Repeated games in continuous time as extensive form games
AU - Alós-Ferrer, Carlos
AU - Kern, Johannes
N1 - Funding Information:
We would like to thank the co-editor, Sven Rady, three anonymous referees, Dilip Abreu, Michael Greinecker, Joseph Halpern, Sergiu Hart, Jean-Jacques Herings, Johannes Hoerner, George Mailath, Philip Reny, Klaus Ritzberger, Larry Samuelson, Eric van Damme, and Jörgen Weibull as well as participants at the EBIM Doctoral Workshop 2010, UECE Lisbon Meetings 2011, IHS Workshop in honor of Harold Kuhn, the 5th RGS Doctoral Conference in Economics, and GAMES 2012 for helpful comments and suggestions. We gratefully acknowledge financial support from the German Research Foundation through research project AL-1169/1.
Publisher Copyright:
© 2015 Elsevier B.V.
PY - 2015/12/1
Y1 - 2015/12/1
N2 - Extensive form games modeling continuous-time decisions are plagued with problems of nonexistence and nonuniqueness of outcomes. As a "second-best", the literature has imposed extraneous restrictions on the strategy sets, raising questions on the nature and interpretation of the resulting formal object, and on which restrictions are appropriate. We provide a "first-best" framework, formalizing continuous-time repeated games as extensive form games incorporating natural conditions from the onset. Every strategy profile induces a unique outcome, without any restrictions on the strategy sets. Further, the unrestricted strategy sets are equivalent to a specific class of strategies in a more naïvely specified continuous-time game.
AB - Extensive form games modeling continuous-time decisions are plagued with problems of nonexistence and nonuniqueness of outcomes. As a "second-best", the literature has imposed extraneous restrictions on the strategy sets, raising questions on the nature and interpretation of the resulting formal object, and on which restrictions are appropriate. We provide a "first-best" framework, formalizing continuous-time repeated games as extensive form games incorporating natural conditions from the onset. Every strategy profile induces a unique outcome, without any restrictions on the strategy sets. Further, the unrestricted strategy sets are equivalent to a specific class of strategies in a more naïvely specified continuous-time game.
KW - Continuous time
KW - Extensive forms
KW - Repeated games
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U2 - 10.1016/j.jmateco.2015.07.006
DO - 10.1016/j.jmateco.2015.07.006
M3 - Article
AN - SCOPUS:84948778233
SN - 0304-4068
VL - 61
SP - 34
EP - 57
JO - Journal of Mathematical Economics
JF - Journal of Mathematical Economics
ER -