This book brings together the joint work of Drew Fudenberg and David Levine (through 2008) on the closely connected topics of repeated games and reputation effects, along with related papers on more general issues in game theory and dynamic games. The unified presentation highlights the recurring themes of their work.
Contents: Limits, Continuity and Robustness: ; Subgame-Perfect Equilibria of Finite- and Infinite-Horizon Games (D Fudenberg & D K Levine); Limit Games and Limit Equilibria (D Fudenberg & D K Levine); Open-Loop and Closed-Loop Equilibria in Dynamic Games with Many Players (D Fudenberg & D K Levine); Finite Player Approximations to a Continuum of Players (D Fudenberg & D K Levine); On the Robustness of Equilibrium Refinements (D Fudenberg et al.); When are Nonanonymous Players Negligible? (D Fudenberg et al.); Reputation Effects: ; Reputation and Equilibrium Selection in Games with a Patient Player (D Fudenberg & D K Levine); Maintaining a Reputation When Strategies are Imperfectly Observed (D Fudenberg & D K Levine); Maintaining a Reputation Against a Long-Lived Opponent (M Celentani et al.); When is Reputation Bad? (J Ely et al.); Repeated Games: ; The Folk Theorem in Repeated Games with Discounting or with Incomplete Information (D Fudenberg & E Maskin); The Folk Theorem with Imperfect Public Information (D Fudenberg et al.); Efficiency and Observability with Long-Run and Short-Run Players (D Fudenberg & D K Levine); An Approximate Folk Theorem with Imperfect Private Information (D Fudenberg & D K Levine); The Nash-Threats Folk Theorem with Communication and Approximate Common Knowledge in Two Player Games (D Fudenberg & D K Levine); Perfect Public Equilibria When Players are Patient (D Fudenberg et al.); Continuous Time Limits of Repeated Games with Imperfect Public Monitoring (D Fudenberg & D K Levine).
Author(s): Drew Fudenberg, Drew Fudenberg, David K. Levine
Publisher: World Scientific Publishing Company
Year: 2008
Language: English
Pages: 417
CONTENTS......Page 8
Acknowledgments......Page 6
Understanding Dynamic Games: Limits, Continuity, and Robustness......Page 10
Reputation Effects......Page 12
Repeated Games......Page 15
Private Information......Page 19
Long Run and Short Run Players......Page 20
References......Page 22
I. Limits, Continuity and Robustness......Page 26
1. INTRODUCTION......Page 28
2. GAMES, SUBGAMES, AND EQUILIBRIA......Page 29
3. CONTINUITY AND LIMIT EQUILIBRIA......Page 35
4. FINITE-AcTION GAMES......Page 38
5. UNIQUENESS OF THE INFINITE-HORIZON PERFECT EQUILIBRIUM......Page 39
6. SEQUENTIAL EQUILIBRIA......Page 42
REFERENCES......Page 44
1. INTRODUCTION......Page 46
2. RELATED WORK......Page 47
3. BASIC NOTIONS......Page 48
4. FINITE- TO INFINITE-HORIZON LIMITS......Page 52
5. OPEN-Loop EQUILIBRIUM......Page 53
6. MIXED STRATEGIES......Page 54
7. THE INHERENT TOPOLOGY......Page 57
8. TWO-PERSON TIMING GAMES......Page 62
REFERENCES......Page 64
1. INTRODUCTION......Page 66
2. THE MODEL......Page 67
3. THE NONATOMIC CASE......Page 72
4. AN EXAMPLE......Page 73
5. UPPER HEMI-CONTINUITY......Page 76
6. THE DIFFERENTIAL ApPROACH TO LOWER HEMI-CONTINUITY......Page 79
7. THE e-EQUILIBRIUM ApPROACH TO LOWER HEMI-CONTINUITY......Page 80
8. THE MANY-PERIOD CASE......Page 81
9. RELATED WORK......Page 82
REFERENCES......Page 83
1. Introduction......Page 84
3. A Game of Averages......Page 85
4. The General Case......Page 86
References......Page 90
1. INTRODUCTION......Page 92
2. NORMAL FORM GAMES AND PAYOFF PERTURBATIONS......Page 95
3. EXTENSIVE GAMES AND PAYOFF PERTURBATIONS......Page 97
4.1. An Example......Page 99
4.2. Elaboration Perturbations......Page 100
4.3. Near Strictness under General Elaborations......Page 102
5.1. Independent Types......Page 106
5.2. Personal Types......Page 113
REFERENCES......Page 117
l. INTRODUCTION......Page 120
2. THE "ONE-SHOT" MODEL......Page 124
4. GAMES WITH INDIVIDUALIZED PUNISHMENT......Page 129
5. CONTINGENT AND UNCONTINGENT COMMITMENTS......Page 131
6. REPEATED GAMES......Page 136
7. CONCLUSIONS......Page 138
APPENDIX A......Page 139
REFERENCES......Page 145
II. Reputation Effects......Page 146
1. INTRODUCTION......Page 148
2. THE SIMPLE MODEL......Page 150
3. THE PERTURBED GAME......Page 152
4. EXAMPLES......Page 156
5. GENERAL DETERMINISTIC STAGE GAMES......Page 159
6. GENERAL FINITE STATE GAMES......Page 162
7. GAMES WITH A CONTINUUM OF STRATEGIES......Page 164
REFERENCES......Page 167
1. INTRODUCTION......Page 168
2. THE MODEL......Page 171
3. SELF-CONFIRMING RESPONSES AND EQUILIBRruM PAYOFFS......Page 174
4. BAYESIAN INFERENCE AND ACTIVE SUPERMARTINGALES......Page 180
APPENDIX: ACTIVE SUPERMARTINGALES......Page 183
REFERENCES......Page 185
1. INTRODUCTION......Page 188
2. THE MODEL......Page 190
3. AN IMPATIENT PLAYER 2......Page 192
5. EXAMPLE......Page 196
APPENDIX......Page 200
REFERENCES......Page 201
1. Introduction......Page 202
2.1. The dynamic game......Page 207
2.2. The Ely-Valimaki example......Page 208
2.3. Participation games and bad reputation games......Page 209
3. The theorem......Page 212
4.1. EVwith Stackelberg type......Page 215
4.2. Adding an observed action to EV......Page 216
4.3. Exit minmax......Page 218
5. Poor reputation games and strong temptations......Page 220
6. Principal-agent entry games......Page 222
Acknowledgments......Page 225
Appendix A. Proofs......Page 226
References......Page 230
III. Repeated Games......Page 232
1. INTRODUCTION......Page 234
2. THE CLASSICAL FOLK THEOREM aj......Page 237
3A. Two-Player Games......Page 240
3B. Three or More Players......Page 243
4. INCOMPLETE INFORMATION WITH NASH THREATS......Page 246
5. THE FOLK THEOREM IN FINITELY REPEATED GAMES OF INCOMPLETE INFORMATION......Page 248
6. UNOBSERVABLE MIXED STRATEGIES......Page 253
REFERENCES......Page 255
1. INTRODUCTION......Page 256
2. THE MODEL......Page 258
3. EXAMPLES......Page 262
4. ENFORCEABLE ACTIONS AND DECOMPOSABLE PAYOFFS......Page 267
5. ENFORCEABILITY AND IDENTIFIABILITY......Page 272
6. THE FOLK THEOREM......Page 278
7. GAMES WITH A PRODUCT STRUCTURE......Page 286
8. ADVERSE SELECTION......Page 287
9. PRINCIPAL-AGENT MODELS......Page 289
10. CONCLUDING REMARKS......Page 292
APPENDIX 1......Page 293
APPENDIX 2......Page 294
APPENDIX 3......Page 296
REFERENCES......Page 297
1. INTRODUCTION......Page 300
2. THE MODEL......Page 303
3. ENFORCEABILITY ON HALF-SPACES AND THE SET OF LIMIT EQUILIBRIA......Page 306
4. A PARTNERSHIP GAME......Page 308
5. GAMES WITH A PRODUCT STRUCTURE......Page 313
6. MORAL HAZARD MIXING GAMES......Page 317
7. AN INVESTMENT GAME......Page 322
8. ANALYSIS OF THE INVESTMENT GAME......Page 324
APPENDIX A: CHARACTERIZING EQUILIBRIA WITH HALFSPACES......Page 328
APPENDIX B: EQUIVALENCE OF PERFECT PUBLIC AND SEQUENTIAL EQUILIBRIUM PAYOFFS WITH A PRODUCT STRUCTURE......Page 329
REFERENCES......Page 331
1. INTRODUCTION......Page 334
2. THE MODEL......Page 336
3. DISCOUNTING AND TIME AVERAGING......Page 340
4. A FOLK THEOREM......Page 344
ApPENDIX......Page 351
REFERENCES......Page 354
1. Introduction......Page 356
3. The structure of information......Page 358
4. The Nash-threats folk theorem......Page 360
S. Discussion......Page 363
Appendix A. Completion of the proof of the theorem......Page 364
References......Page 368
1. Introduction......Page 370
2. Model......Page 371
3. The algorithm......Page 373
4.1. Fudenberg and Maskin 's example......Page 379
4.2. Characterization o/the limit payoffs in general stage games with observed actions and all long-run players......Page 380
4.3.2. Partially symmetric equilibria......Page 384
4.4. Exact achievability of first-best outcomes......Page 385
A. 2. Proof of Lemma 4.5......Page 387
References......Page 392
1. Introduction......Page 394
2. The repeated commitment game......Page 398
3. Sending the time interval to zero......Page 402
4. Fixed-intensity Poisson signals......Page 404
5. Diffusion signals with common variance......Page 405
6.1. Extreme values are bad news: 0'-1 > 0'+1......Page 408
6.2. Extreme values are good news: O"+l > 0"-1......Page 410
References......Page 412
Erratum......Page 414
