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A Few Bad Apples Spoil the Barrel: An Anti-folk Theorem for Anonymous Repeated Games with Incomplete Information

Resource type
Authors/contributors
Title
A Few Bad Apples Spoil the Barrel: An Anti-folk Theorem for Anonymous Repeated Games with Incomplete Information
Abstract
We study anonymous repeated games where players may be "commitment types" who always take the same action. We establish a stark anti-folk theorem: if the distribution of the number of commitment types satisfies a smoothness condition and the game has a "pairwise dominant" action, this action is almost always taken. This implies that cooperation is impossible in the repeated prisoner's dilemma with anonymous random matching. We also bound equilibrium payoffs for general games. Our bound implies that industry profits converge to zero in linear-demand Cournot oligopoly as the number of firms increases.
Publication
American Economic Review
Volume
110
Issue
12
Pages
3817-35
Date
2020-12
Citation
Sugaya, T., & Wolitzky, A. (2020). A Few Bad Apples Spoil the Barrel: An Anti-folk Theorem for Anonymous Repeated Games with Incomplete Information. American Economic Review, 110, 3817–3835.
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