Parabolic Cylinders and Folk Theorems

Delbono, Flavio ; Lambertini, Luca (2015) Parabolic Cylinders and Folk Theorems. Bologna: Dipartimento di Scienze economiche DSE, p. 21. DOI 10.6092/unibo/amsacta/4415. In: Quaderni - Working Paper DSE (1043). ISSN 2282-6483.
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Abstract

We study a class of games featuring payoff functions being parabolic cylinders where best reply functions are orthogonal and therefore the pure-strategy non-cooperative solution is attained as a Nash equilibrium in dominant strategies. We prove that the resulting threshold of the discount factor above which implicit collusion on the Pareto frontier is stable in the infinite supergames is independent of the number of players. This holds irrespective of whether punishment is based on infinite Nash reversion or one-shot stick-and-carrot strategy. We outline two examples stemming from economic theory and one from international relations.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Delbono, Flavio
Lambertini, Luca
Keywords
parabolic cylinder, supergame, folk theorem, implicit collusion
Subjects
ISSN
2282-6483
DOI
Deposit date
14 Dec 2015 09:45
Last modified
07 Jun 2017 08:17
URI

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