Instability of Belief-Free Equilibria

Heller, Yuval (2017): Instability of Belief-Free Equilibria. Forthcoming in: Journal of Economic Theory No. forthcoming

Abstract

Various papers have presented folk-theorem results that yield efficiency in the repeated Prisoner's Dilemma with imperfect private monitoring. I present a mild refinement that requires robustness against small perturbations in the behavior of potential opponents, and I show that only defection satisfies this refinement among all the existing equilibria in the literature.

• Item Type: MPRA Paper
• Language: English
• Keywords: Belief-free equilibrium, evolutionary stability, imperfect private monitoring, repeated Prisoner's Dilemma, communication.
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C73 - Stochastic and Dynamic Games ; Evolutionary Games ; Repeated Games; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design

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