The robustness of incomplete penal codes in repeated interactions
The robustness of incomplete penal codes in repeated interactions — CREST Working Paper, 2020
Abstract
We study the robustness of equilibria with regards to small payoff perturbations of the dynamic game. We find that complete penal codes, that specify players’ strategies after every history, have only limited robustness. For some generic games, no complete codes exist that are robust to even arbitrarily small perturbations. We define incomplete penal codes as partial descriptions of equilibrium strategies and introduce a notion of robustness for incomplete penal codes. We prove a Folk Theorem in robust incomplete codes that generates a Folk Theorem in a class of stochastic games.
CREST Working Paper, 2020
Citation
BibTeX citation:
@report{gossner2020,
author = {Gossner, Olivier},
title = {The Robustness of Incomplete Penal Codes in Repeated
Interactions},
date = {2020},
url = {https://gossner.me/papers/the-robustness-of-incomplete-penal-codes-in-repeated-interactions.html},
langid = {en},
abstract = {We study the robustness of equilibria with regards to
small payoff perturbations of the dynamic game. We find that
complete penal codes, that specify players’ strategies after every
history, have only limited robustness. For some generic games, no
complete codes exist that are robust to even arbitrarily small
perturbations. We define incomplete penal codes as partial
descriptions of equilibrium strategies and introduce a notion of
robustness for incomplete penal codes. We prove a Folk Theorem in
robust incomplete codes that generates a Folk Theorem in a class of
stochastic games.}
}
For attribution, please cite this work as:
Gossner, Olivier. 2020. “The Robustness of Incomplete Penal Codes
in Repeated Interactions.” In CREST Working Paper. https://gossner.me/papers/the-robustness-of-incomplete-penal-codes-in-repeated-interactions.html.