Dismissals and quits in repeated games

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

This paper studies repeated games, where player 1 can decide to let the opponent continue or replace her by a new player. We also allow for the possibility of player 2 quitting the game. When only layoffs can occur, a folk theorem for finite horizons obtains due to the threat that termination of the relationship imposes on player 2. However, quits limit this result to those cases in which the outside option for player 2 is small (lower than some Nash equilibrium payoff of the stage game).

Original languageEnglish (US)
Pages (from-to)67-80
Number of pages14
JournalEconomic Theory
Volume43
Issue number1
DOIs
StatePublished - Apr 1 2010
Externally publishedYes

Keywords

  • Dismissal
  • Folk theorem
  • Quit
  • Repeated games

ASJC Scopus subject areas

  • Economics and Econometrics

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