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Ulric B. and Evelyn L. Bray Social Sciences Seminar

Wednesday, October 23, 2019
4:00pm to 5:00pm
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Baxter B125
Steady-State Equilibria in Anonymous Repeated Games
Alex Wolitzky, Associate Professor, Department of Economics, Massachusetts Institute of Technology,

Abstract: We introduce a new model of repeated games in large populations with random matching, overlapping generations, and limited records of past play. We prove that steady-state equilibria exist under general conditions on records. We then focus on "trigger-strategy" equilibria. When the updating of a player's record can depend on the actions of both players in a match, steady-state equilibria in trigger strategies can support the play of a wide range of actions, including any action that Pareto-dominates a static Nash equilibrium. When updates can depend only on a player's own actions, fewer actions can be supported by steady-state equilibria. We provide sufficient conditions for trigger equilibria to support a given action, along with somewhat more permissive necessary conditions. When players have access to a form of decentralized public randomization, the sufficient conditions expand to match the necessary conditions.

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