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Title:Prisoners' other dilemma PDF Logo
Authors:Blonski, Matthias
Spagnolo, Giancarlo
Issue Date:2001
Series/Report no.:SSE/EFI Working Paper Series in Economics and Finance 437
Abstract:We find that contrary to common perception, cooperation as equilibrium of the infinitely repeated discounted prisoner's dilemma is in many relevant cases not very plausible, or at least questionable: for a significant subset of the payoff-discount factor parameter space cooperation equilibria are strictly risk dominated by non-cooperation (according to the Harsanyi-Selten 1988 criterion). Examples include collusion equilibria in the repeated Cournot duopoly.
Subjects:Prisoner's Dilemma
Risk dominance
Repeated games
Equilibrium selection
Cooperation
Collusion
JEL:C72
Document Type:Working Paper
Appears in Collections:SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics

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