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Game theory is a study of situations of strategic interaction between two or more players in which there is a predefined set of rules and an outcome associated with each choice taken.

4 votes
1 answer
674 views

Monotone transformation of a game

What happens to the Nash equilibria and minimax values of a strategic game, when we take its payoff table and modify all payoffs by raising them to the 3rd power? My conjecture is that it depends …
Erel Segal-Halevi's user avatar
1 vote
1 answer
50 views

Repeatedly playing an equilibrium in a repeated game

What is a formal proof to this known fact about repeated games? The situation in which, in every time step, the players play a Nash equilibrium in the basic game unconditioned on history, is a Nas …
Erel Segal-Halevi's user avatar
1 vote
Accepted

Repeatedly playing an equilibrium in a repeated game

Suppose all players play unconditioned Nash equilibria, except player $i$ who diverts and plays another strategy. The other strategy of player $i$ may depend on history. We have to show that player $i …
Erel Segal-Halevi's user avatar
5 votes
1 answer
196 views

A feasible rational payoff that is not an equilibrium payoff in the repeated game

The textbook I am currently reading claims that, in an infinitely-repeated game with discount, there might be a payoff vector which is feasible and individually-rational, but it is not an equilibrium …
Erel Segal-Halevi's user avatar
2 votes
1 answer
69 views

Buy-or-sell deal when there is cash shortage

A company is owned by two partners: partner $A$ holds a fraction $a$ and partner $B$ holds a fraction $b$ (with $a+b=1$). Partner $A$ wants to break the partnership. A common procedure for this is tha …
Erel Segal-Halevi's user avatar
8 votes
1 answer
1k views

Real-life applications of repeated games theory

What are some scenarios in which the theory of repeated games have been applied? I am looking, for example, for scenarios in which a government, a firm or a person accepted a decision which relied up …
Erel Segal-Halevi's user avatar
2 votes
0 answers
30 views

How much information is required to manipulate a mechanism?

It is well-known that the first-price auction is manipulable, in that a player can improve his utility by bidding less than his true value. But successful manipulation requires information: the player …
Erel Segal-Halevi's user avatar
2 votes
1 answer
57 views

Repeated games with decreasing marginal returns

The standard analysis of repeated games assumes that the payoff of a player from a repeated game is a sum (or arithmetic mean, or discounted sum) of the payoffs in the basic games. But what if the pl …
Erel Segal-Halevi's user avatar
4 votes

Economics of forgetting

This topic has been studied widely in the theory of repeated games. See for example: Robert J. Aumann, Sylvain Sorin: Cooperation and bounded recall, Games and Economic Behavior, Vol. 1, No. 1. (Marc …
Erel Segal-Halevi's user avatar
3 votes
2 answers
264 views

Payoffs in an infinitely-repeated game with discounting

Consider a game with the following payoff matrix: 3,5 0,0 0,0 0,0 5,3 0,0 0,0 0,0 0,0 Suppose the game is played infinitely many times, and both players have discount factor $\delta$. …
Erel Segal-Halevi's user avatar
1 vote
1 answer
112 views

Revenue-maximizing auction with no free disposal

Myerson has a famous theory that can be used to design truthful auctions maximizing the revenue of the seller. The simplest case is when a seller sells a single item to buyers whose values are indepen …
Erel Segal-Halevi's user avatar