Construction of subgame-perfect mixed-strategy equilibria in repeated games

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Construction of subgame-perfect mixed-strategy equilibria in repeated games. / Berg, Kimmo; Schoenmakers, Gijs.

In: Games, Vol. 8, No. 4, 47, 01.12.2017, p. 1-14.

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Berg, Kimmo ; Schoenmakers, Gijs. / Construction of subgame-perfect mixed-strategy equilibria in repeated games. In: Games. 2017 ; Vol. 8, No. 4. pp. 1-14.

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@article{8f77d12980fb48f28d79abc5f1375737,
title = "Construction of subgame-perfect mixed-strategy equilibria in repeated games",
abstract = "This paper examines how to construct subgame-perfect mixed-strategy equilibria in discounted repeated games with perfect monitoring. We introduce a relatively simple class of strategy profiles that are easy to compute and may give rise to a large set of equilibrium payoffs. These sets are called self-supporting sets, since the set itself provides the continuation payoffs that are required to support the equilibrium strategies. Moreover, the corresponding strategies are simple as the players face the same augmented game on each round but they play different mixed actions after each realized pure-action profile. We find that certain payoffs can be obtained in equilibrium with much lower discount factor values compared to pure strategies. The theory and the concepts are illustrated in 2 × 2 games.",
keywords = "Mixed strategy, Payoff set, Repeated game, Subgame perfection",
author = "Kimmo Berg and Gijs Schoenmakers",
year = "2017",
month = "12",
day = "1",
doi = "10.3390/g8040047",
language = "English",
volume = "8",
pages = "1--14",
journal = "Games (MDPI)",
issn = "2073-4336",
publisher = "Multidisciplinary Digital Publishing Institute (MDPI)",
number = "4",

}

RIS - Download

TY - JOUR

T1 - Construction of subgame-perfect mixed-strategy equilibria in repeated games

AU - Berg, Kimmo

AU - Schoenmakers, Gijs

PY - 2017/12/1

Y1 - 2017/12/1

N2 - This paper examines how to construct subgame-perfect mixed-strategy equilibria in discounted repeated games with perfect monitoring. We introduce a relatively simple class of strategy profiles that are easy to compute and may give rise to a large set of equilibrium payoffs. These sets are called self-supporting sets, since the set itself provides the continuation payoffs that are required to support the equilibrium strategies. Moreover, the corresponding strategies are simple as the players face the same augmented game on each round but they play different mixed actions after each realized pure-action profile. We find that certain payoffs can be obtained in equilibrium with much lower discount factor values compared to pure strategies. The theory and the concepts are illustrated in 2 × 2 games.

AB - This paper examines how to construct subgame-perfect mixed-strategy equilibria in discounted repeated games with perfect monitoring. We introduce a relatively simple class of strategy profiles that are easy to compute and may give rise to a large set of equilibrium payoffs. These sets are called self-supporting sets, since the set itself provides the continuation payoffs that are required to support the equilibrium strategies. Moreover, the corresponding strategies are simple as the players face the same augmented game on each round but they play different mixed actions after each realized pure-action profile. We find that certain payoffs can be obtained in equilibrium with much lower discount factor values compared to pure strategies. The theory and the concepts are illustrated in 2 × 2 games.

KW - Mixed strategy

KW - Payoff set

KW - Repeated game

KW - Subgame perfection

UR - http://www.scopus.com/inward/record.url?scp=85035353770&partnerID=8YFLogxK

U2 - 10.3390/g8040047

DO - 10.3390/g8040047

M3 - Article

VL - 8

SP - 1

EP - 14

JO - Games (MDPI)

JF - Games (MDPI)

SN - 2073-4336

IS - 4

M1 - 47

ER -

ID: 16399055