If, in international agreements, governments “link'' trade to environmental policy (or other issues with non-pecuniary externalities), will this promote more cooperation in both policies or will cooperation in one policy be strengthened at the expense of the other? We analyze this question in...

We experimentally test whether a class of monetary policy decision rules describes decision making in a population of inexperienced central bankers. In our experiments, subjects repeatedly set the short-term interest rate for a computer economy with inflation as their target. A large majority of...

We examine a new class of games, which we call social games, where players not only choose strategies but also choose with whom they play. A group of players who are dissatisfied with the play of their current partners can join together and play a new equilibrium. This imposes new refinements on...

This paper examines characteristics of cooperative behavior in a repeated, n-person, continuous action generalization of a Prisoner's Dilemma game. When time preferences are heterogeneous and bounded away from one, how "much" cooperation can be achieved by an ongoing group? How does group...

We show that, in repeated common interest games without discounting, strong `perturbation implies efficiency' results require that the perturbations must include strategies which are `draconian' in the sense that they are prepared to punish to the maximum extent possible. Moreover, there is a...

In this work we extend a result of Lehrer characterizing the correlated equilibrium payoffs in undiscounted two player repeated games with partial monitoring to the case in which the signals are permitted to be stochastic. In particular we develop appropriate versions of Lehrer's concepts of...

Suppose Player A is playing two apparently independent repeated games with two other people, B and C, with A randomly matched, each period, with either B or C. Each dyad maintains the maximum incentive-compatible level of cooperation within the dyad, even if cooperation has broken down in the...

We analyze the problem of coordinating upon asymmetric equilibria in a symmetric game, such as the battle-of-the-sexes. In repeated interaction, asymmetric coordination is possible possible via symmetric repeated game strategies. This requires that players randomize initially and adopt a...

In a repeated game with private information, a perfect public equilibrium (PPE) can break down if communication is not necessarily simultaneous or if players can “spy” on each others’ information. An ex post perfect public equilibrium (EPPPE) is a PPE that is ex post incentive compatible...

We present a synthesis of the various folk theorems for repeated games using a model that accommodates both finitely and infinitely repeated games with discounting. We derive a central result for this model and show that the various folk theorems follow as a consequence. Our result encompasses...