On the irrelevance of risk attitudes in repeated two-outcome games

Publisher:
Academic Press Inc
Publication Type:
Journal Article
Citation:
Games And Economic Behavior, 2001, 34 (2), pp. 342 - 363
Issue Date:
2001-01
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We study equilibrium and maximin play in supergames consisting of the sequential play of a finite collection of stage games, where each stage game has two outcomes for each player. We show that for two-player supergames in which each stage game is strictly competitive, in any Nash equilibrium of the supergame, play at each stage is a Nash equilibrium of the supergame provided preferences over certain supergame outcomes satisfy a natural monotonicity condition. In particular, equilibrium play does not depend on risk attitudes. We establish an invariance result for games with more than two players when the solution concept is subgame perfection. Classification Numbers: C72, C9.
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