Efficiency and renegotiation in repeated games
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
|Journal / Publication||Journal of Economic Theory|
|Publication status||Published - Oct 1993|
|Link to Scopus||https://www.scopus.com/record/display.uri?eid=2-s2.0-0001040089&origin=recordpage|
In this paper we present a general framework for the discussion of renegotiation in repeated games, provide a new concept of “renegotiation-proof“ equilibrium, and show how the framework clarifies and unifies existing work. We define an agreement as a sequence of payoffs sets, one for each history in the game. We adopt an axiomatic approach to restricting agreements and show how different restrictions an agreements lead to different concepts of renegotiation-proofness. This provides a synthesis of the existing literature. Also, in this framework we introduce a new concept of renegotiation-proofness called recursive efficiency. Journal of Economic Literature Classification Numbers: C70, C72, D70.