Infinitely Repeated Games

We have seen in the previous modules that long-term interactions are fundamentally different from one-shot interactions especially in the presence of uncertainty. Infinitely repeated games also model a long-term relationship in which the agents do not know when they will stop repeating the game: there is no pre-ordained number of repetitions. Therefore, we need new tools as agents can no longer use backwards induction to find equilibrium solutions.

Elements

1. 3.4.aFeasibility in Infinitely Repeated Games

   The ability to identify if a payoff is feasible in a Nash equilibrium of an infinitely repeated game.

2. 3.4.bEnforceability in Infinitely Repeated Games

   The ability to identify if a payoff is enforceable in a Nash equilibrium of an infinitely repeated game.

3. 3.4.cTrigger Strategies

   The ability to compute and select the correct trigger strategy. E.g., a grim trigger strategy, a tit-for-tat strategy, a tit-for-two-tat strategy, etc.