Document Type
Discussion Paper
Publication Date
2-1-2012
CFDP Number
1848
CFDP Pages
20
Abstract
This paper provides a dual characterization of the limit set of perfect public equilibrium payoffs in stochastic games (in particular, repeated games) as the discount factor tends to one. As a first corollary, the folk theorems of Fudenberg, Levine and Maskin (1994), Kandori and Matsushima (1998) and Hörner, Sugaya, Takahashi and Vieille (2011) obtain. As a second corollary, in the context of repeated games, it follows that this limit set of payoffs is a polytope (a bounded polyhedron) when attention is restricted to equilibria in pure strategies. We provide a two-player game in which this limit set is not a polytope when mixed strategies are considered.
Recommended Citation
Hörner, Johannes; Takahashi, Satoru; and Vieille, Nicolas, "On the Limit Equilibrium Payoff Set in Repeated and Stochastic Games" (2012). Cowles Foundation Discussion Papers. 2207.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2207