A folk theorem for stochastic games

Article Abstract:

Dynamic strategic interaction that has been examined in terms of repeated game theory has wrongly assumed the absence of variable changes. In such cases, a stochastic game is better applied due to state variable representation of the game environment. Games covering completely communicating stochastic observations up to games characterized by deterministic capital accumulation have incentives conditioned by the discount factor's proximity to 1.

Random variables

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Collusion, discounting and dynamic games

Article Abstract:

The relationship between market player patience in dynamic games and the achievement of collusive outcomes is examined. Such a relationship breaks down under dynamic game conditions, where impatient players sustain collusion while patient players do not. However, declining worst payoff games allow the achievement of equilibrium outcomes for both players with a discount factor and for players with higher discount factors.

Price cutting, Trade discounts

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How different can strategic models be?

Article Abstract:

The implications of strategic behavior sometimes differ from outcomes derived within comparative frameworks. A common-property resource model is used to analyze these differences. Game-theoretic analogs, which are represented by Markov Perfect Equilibria, are compared with Markovian optimal solutions. Situations in which dynamic behavior is erratic are also analyzed.

Models, Games of strategy (Mathematics)

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