Blackwell Equilibrium in Repeated Games
Theoretical Economics
2025-01-13 v1 Optimization and Control
Abstract
We apply Blackwell optimality to repeated games. An equilibrium whose strategy profile is sequentially rational for all high enough discount factors simultaneously is a Blackwell (subgame-perfect, perfect public, etc.) equilibrium. The bite of this requirement depends on the monitoring structure. Under perfect monitoring, a ``folk'' theorem holds relative to an appropriate notion of minmax. Under imperfect public monitoring, absent a public randomization device, any perfect public equilibrium generically involves pure action profiles or stage-game Nash equilibria only. Under private conditionally independent monitoring, in a class of games that includes the prisoner's dilemma, the stage-game Nash equilibrium is played in every round.
Cite
@article{arxiv.2501.05481,
title = {Blackwell Equilibrium in Repeated Games},
author = {Costas Cavounidis and Sambuddha Ghosh and Johannes Hörner and Eilon Solan and Satoru Takahashi},
journal= {arXiv preprint arXiv:2501.05481},
year = {2025}
}