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Full-Text Articles in Social and Behavioral Sciences
Renegotiation And Symmetry In Repeated Games, Dilip Abreu, David G. Pearce, Ennio Stacchetti
Renegotiation And Symmetry In Repeated Games, Dilip Abreu, David G. Pearce, Ennio Stacchetti
Cowles Foundation Discussion Papers
It seems reasonable to suppose that in repeated games in which communications is possible, play is determined through a process of negotiation and renegotiation as events unfold. In the absence of a satisfying theory of players’ bargaining power, it is unclear how to model this process. Symmetric repeated games are an important class in which the problem is less troublesome. Whatever its source, bargaining power is presumably the same for all players in a symmetric game. We take equal bargaining power to mean that a player can mount a credible objection to a continuation equilibrium in which he receives a …