Extremal equilibria of oligopolistic supergames

Dilip Abreu

Research output: Contribution to journalArticle

331 Scopus citations

Abstract

General propositions established in Abreu (Ph.D. thesis, Princeton University, October 1983) are applied to the analysis of optimal punishments and constrained Pareto optimal paths of symmetric oligopolistic supergames. A remarkably simple 2-dimensional stick-and-carrot characterization of optimal symmetric punishments is obtained. An analogous result holds for the general case of asymmetric punishments, motivating the study of asymmetric Pareto optimal paths. The latter turn out to have a highly non-stationary dynamic structure which sometimes entails intertemporal reversals of relative payoffs between firms.

Original languageEnglish (US)
Pages (from-to)191-225
Number of pages35
JournalJournal of Economic Theory
Volume39
Issue number1
DOIs
StatePublished - Jun 1986

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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