CIRJE-F-875 | "Interlinkage and Generous Tit-for-Tat Strategy" |
Author Name | Matsushima, Hitoshi |
Date | February 2013 |
Full Paper | PDF file |
Remarks | Revised version of CIRJE-F-492 (2007); further revision will be forthcoming in Japanese Economic Review. |
Abstract |
We investigate an infinitely repeated prisoners' dilemma with imperfect monitoring and projects the possibility that the interlinkage of the players' distinct activities enhances implicit collusion. We show a necessary and sufficient condition for the existence of generous tit-for-tat Nash equilibrium. Such an equilibrium, if it exists, is unique. This equilibrium achieves approximate efficiency when monitoring is almost perfect, where the discount factors are fixed. |