Finitely Repeated, Static Games with Complete Information
Thomas J. Webster · 2018
We have thus far considered the two extreme versions of static games with complete information: those that are played just once, and those that are played an infi nite number of times. We saw in Chapter 4 that in infi nitely repeated, static games it may be possible to escape the prisoner’s dilemma if the present value of the stream of future payoffs by cooperating is greater than by not cooperating. Even when it is not in the best interest of the players to cooperate, it may still be possible to introduce stability into a collusive arrangement using trigger strategies and credible threats. Even when threats are credible, however, cheating may still occur if defection is profi table. One of the questions that we will seek to answer in this chapter is whether it is still possible to solve the prisoner’s dilemma when all players know that the game will be played more than once, but a fi nite number of times.