Yale Lectures 21 and 22
21. Repeated Games: Cooperation vs
th E d Gthe End Game
Most relationships are not contractual.
Between nations, no court to take it to.
· In ongoing relationships, the promise of future rewards and the
threat of future punishments MAY sometimes provide incentives for
good behavior today But for this to work it helps to have a futuregood behavior today. But for this to work, it helps to have a future.
· End effects: lame duck, retirement, economics major's
· Repeated interaction does not induce cooperation in a finite period
· We can sustain equilibrium even if finite game, but it requiresWe can sustain equilibrium even if finite game, but it requires
multiple equilbrium, can use one as a reward and one as a
punishment. Can use that difference to encourage cooperation