A Few Bad Apples Spoil the Barrel: An Anti-Folk Theorem for Anonymous Repeated Games with Incomplete Information
Name
aer.20200068.pdf
Description
Published version
Size
599.84 KB
Format
Adobe PDF
Checksum (MD5)
442a9749fc66f1e7afe7c298f2226c3b
Author(s)
Sugaya, Takuo
Wolitzky, Alexander
Date Issued
2020
Journal
American Economic Review
Publisher
American Economic Association
Citation
Sugaya, Takuo and Wolitzky, Alexander. 2020. "A Few Bad Apples Spoil the Barrel: An Anti-Folk Theorem for Anonymous Repeated Games with Incomplete Information." American Economic Review, 110 (12).
Version
Final published version
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. (JEL C72, C73, D83)
MIT Department
Massachusetts Institute of Technology. Department of Economics
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/AER.20200068
