We consider a class of Dynkin games in the case where the underlying process evolves according to a one-dimensional but otherwise general diffusion. We establish general conditions under which both the value and the saddle point equilibrium exist and under which the exercise boundaries...

We study the existence of pure strategy Markov perfect equilibria in two-person perfect information games. There is a state space X and each period player's possible actions are a subset of X. This set of feasible actions depends on the current state, which is determined by the choice of the...

Pure strategy Markov perfect equilibria (MPE) in dynamic cake sharing problems are analyzed. Each player chooses under perfect information how much to eat from the current cake and how much to leave to the next period. The left over cake grows according to a given growth function. With linear...

This paper characterizes the subgame-perfect pure-strategy equilibrium paths in discounted supergames with perfect monitoring. It is shown that all the equilibrium paths are composed of fragments called elementary subpaths. This characterization result is complemented with an algorithm for...

We examine the effect of the replacement rule of a social insurance system on sickness absence. The elasticity of absence with respect to the benefit level is a critical parameter in defining the optimal sickness insurance scheme. A pre-determined, piecewise linear policy rule in which the...

Equilibrium payoffs corresponding to subgame perfect equilibria in pure strategies are characterized for infinitely repeated games with discounted payoffs. The equilibrium payoff set of a game is a fixed-point of set-valued operators introduced in the paper. The new operator formalism is...

This paper considers subgame perfect equilibria of continuous-time repeated games with perfect monitoring when immediate reactions to deviations are allowed. The set of subgame perfect equilibrium payoffs is shown to be a fixed-point of a set-valued operator introduced in the paper. For a large...

Reanalyzing 12 experiments on the repeated prisoner's dilemma (PD), we robustly observe three distinct subject types: defectors, cautious cooperators and strong cooperators. The strategies used by these types are surprisingly stable across experiments and uncorrelated with treatment parameters,...

When do we cooperate and why? This question concerns one of the most persistent divides between "theory and practice", between predictions from game theory and results from experimental studies. For about 15 years, theoretical analyses predict completely-mixed "behavior" strategies, i.e....

We investigate the welfare effect of increasing competition in an anonymous two-sided matching market, where matched pairs play an infinitely repeated Prisoner's Dilemma. Higher matching efficiency is usually considered detrimental as it creates stronger incentives for defection. We point out,...