Robust Predictions in Infinite-Horizon Games--an Unrefinable Folk Theorem

S-Tier
Journal: Review of Economic Studies
Year: 2013
Volume: 80
Issue: 1
Pages: 365-394

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that in any game that is continuous at infinity, if a plan of action a<sub>i</sub> is played by a type t<sub>i</sub> in a Bayesian Nash equilibrium, then there are perturbations of t<sub>i</sub> for which a<sub>i</sub> is the only rationalizable plan and whose unique rationalizable belief regarding the play of the game is arbitrarily close to the equilibrium belief of t<sub>i</sub>. As an application to repeated games, we prove an unrefinable folk theorem: any individually rational and feasible payoff is the unique rationalizable payoff vector for some perturbed type profile. This is true even if perturbed types are restricted to believe that the repeated-game payoff structure and the discount factor are common knowledge. Copyright , Oxford University Press.

Technical Details

RePEc Handle
repec:oup:restud:v:80:y:2013:i:1:p:365-394
Journal Field
General
Author Count
2
Added to Database
2026-01-29