The role of commitment in repeated games

Abstract

We model the role of commitment in non-cooperative games by means of what we call unilateral commitments. We study their impact within the framework of repeated games with complete information. To do so, we revisit the main folk theorems for repeated games with complete information and check up to what extent the assumptions needed in the classic models can be relaxed in the model with unilateral commitments.

Keywords:

• Repeated games
• Unilateral commitments
• Delegation games
• Folk theorems
• Complete information

Acknowledgements

We thank Ehud Kalai for helpful comments. This research was partially supported by the Xunta de Galicia under project PGIDT03PXIC20701PN and by the Spanish Ministry for Education and Science and FEDER through project BEC2002-04102-C02-02. Julio González-Diaz also acknowledges support from projects SEJ2005-01481/ECON and BEC2003-01132.

Notes

¹ If there are no discounts (i.e., if δ =1), we have .

² We model extensive games following the framework used in 10, except for the fact that we consider that the set of nodes may be infinite.

³ Refer 11 for a deep analysis of the classic equilibrium concepts in n-person games.

⁴ Refer 14 for a complete survey on the topic.