Infinite horizon common interest games with perfect information |
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Authors: | Satoru Takahashi |
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Affiliation: | Department of Economics, Harvard University, Cambridge, MA 02138, USA |
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Abstract: | We consider infinite horizon common interest games with perfect information. A game is a K-coordination game if each player can decrease other players' payoffs by at most K times his own cost of punishment. The number K represents the degree of commonality of payoffs among the players. The smaller K is, the more interest the players share. A K-coordination game tapers off if the greatest payoff variation conditional on the first t periods of an efficient history converges to 0 at a rate faster than K−t as t→∞. We show that every subgame perfect equilibrium outcome is efficient in any tapering-off game with perfect information. Applications include asynchronously repeated games, repeated games of extensive form games, asymptotically finite horizon games, and asymptotically pure coordination games. |
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Keywords: | Common interest Pure coordination Perfect information Subgame perfect equilibrium Asynchronous move Repeated game Anti-folk theorem |
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