Problem
Research questions and friction points this paper is trying to address.
Finitely Repeated Games
Cooperation
Nash Equilibria
Refundable Deposits
Refundable Deposits: How to Restore Cooperation in Finitely Repeated Games
๐ค AI Summary
ๆฌๆ้่ฟๅผๅ
ฅๅฏ้่ฟๆผ้็ๆนๆณ๏ผ่งฃๅณไบๆ้ๆฌก้ๅคๅๅผไธญๅไฝ้พไปฅ็ปดๆ็้ฎ้ข๏ผไฝฟ็ฉๅฎถ่ฝๅคๅฎ็ฐๆด้ซๆ็ๆถ็ๅ้
ใ
๐ Abstract
While infinitely repeated games admit a rich set of Nash equilibria, finitely repeated games typically have a much smaller and often inefficient one. We show how to enlarge this set using deposits: in each period a player may place a refundable sum with a neutral intermediary, returned when the game ends and forfeited following a deviation. Paying these deposits is voluntary and incentive compatible at every stage, so no commitment by the players is assumed, the only commitment required being that of the intermediary to a refund rule fixed before play begins. The mechanism sustains payoff profiles more efficient than those of the standard equilibria, without altering the underlying game and without transfers between players. We demonstrate it on the prisoner's dilemma, a congestion game, and a public goods game, all settings where cooperation cannot emerge in the standard finitely repeated version. We also apply it to a dynamic common-pool resource, suggesting that the construction extends beyond repeated stage-games.
Innovation
Methods, ideas, or system contributions that make the work stand out.
Refundable Deposits
Finitely Repeated Games
Nash Equilibria
Cooperation Restoration
๐ Similar Papers
No similar papers found.
