Repeated games with incomplete information on one side: The case of different discount factors

Ehud Lehrer, Leeat Yariv

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Two players engage in a repeated game with incomplete information on one side, where the underlying stage-games are zero-sum. In the case where players evaluate their stage-payoffs by using different discount factors, the payoffs of the infinitely repeated game are typically non zero-sum. However, if players grow infinitely patient, then the equilibrium payoffs will sometimes approach the zero-sum result, depending on the asymptotic relative patience of the players. We provide sufficient conditions that ensure a zero-sum limit. Moreover, we provide examples of games violating these conditions that possess `cooperative' equilibria whose payoffs are bounded away from the zero-sum payoffs set.

Original languageEnglish (US)
Pages (from-to)204-218
Number of pages15
JournalMathematics of Operations Research
Volume24
Issue number1
DOIs
StatePublished - 1999

All Science Journal Classification (ASJC) codes

  • Mathematics(all)
  • Computer Science Applications
  • Management Science and Operations Research

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