2025/01/07 by Cavounidis, Costas, Ghosh, Sambuddha, Hörner, Johannes +2
#FOS: Economics and business #FOS: Mathematics #Optimization and Control (math.OC) #Theoretical Economics (econ.TH)
paper · doi:10.48550/arxiv.2501.05481
We apply Blackwell optimality to repeated games. An equilibrium whose strategy profile is sequentially rational for all high enough discount factors simultaneously is a Blackwell (subgame-perfect, perfect public, etc.) equilibrium. The bite of this requirement depends on the monitoring structure. Under perfect monitoring, a ``folk'' theorem holds relative to an appropriate notion of minmax. Under imperfect public monitoring, absent a public randomization device, any perfect public equilibrium generically involves pure action profiles or stage-game Nash equilibria only. Under private conditionally independent monitoring, in a class of games that includes the prisoner's dilemma, the stage-game Nash equilibrium is played in every round.