The authors develop a characterization of subgame perfect equilibrium strategies in discounted repeated games that highlights a class of strategies called countervailing. When using countervailing strategies, the players focus on manipulating the other side's payoff to induce his cooperation....

This study argues for a behavioral interpretation of rational choice in a changing environment that potentially restores the equilibria of discounted repeated games as useful descriptors of long-term bilateral relations between nation-states. The analysis reveals that all subgame perfect...

The continuous Prisoner's Dilemma is a reasonable model for nuclear crises (usually represented by “Chickenâ€), and for the arms race. This article addresses the existence of credible deterrence strategies that promote cooperation as a dynamically stable steady state. Decisions made...