Principles of Game Theory. Repeated Games. Administrative. Midterm exam results soon. Let me know if you want to cover any problems in class. Final exam 3 weeks from today (last day of class). Mid-mini feedback Slight change in the schedule:
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“Trust, but Verify”
Equilibrium: $54 K
Cooperation: $60 K
Is it irrational to cooperate in the Prisoners’ Dilemma?
(A note about tacit collusion)
We’ve already seen these…
Cooperation is not an equilibrium with a finite and known length of time.
Grim trigger answers:
“Is cooperation possible?”
“Is cooperation easy?”
How do we calculate if Grimm Trigger (or TFT) is an equilibrium?
60 + 60+60+…
72 + 54+54+…
Welcome to one of the most obvious and most confusing theorems in Game Theory: the “folk” theorem.