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Rubinstein, Ariel
Wolinsky, Asher
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Discussion Paper No. 989
Let Gamma be a game in extensive form and G be its reduced normal form game. Let Gammanfinity (delta) and Gnfinity (delta) be the infinitely repeated game version of Gamma and G respectively, with common discount factor delta. This note points out that the set of SPE payoff vectors of Gammanfinity (delta) might be different from that of G sub infinity (delta), even when delta is arbitrarily close to 1. This difference can be substantial when G fails to satisfy the "dimensionality" condition (a-la Fundenberg and Masking (1986) or Abreu, Dutta and Smith (1992)).
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Working Paper

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