Title |
Game Theory Course: 5.2 Infinitely Repeated Games with Discounting
|
Author |
Jim Ratliff |
|
Category
|
Game Theory
|
Subject |
Repeated Games |
Type |
Article |
Description |
Infinite repetitions of the stage game potentially pose a problem: a player's repeated-game payoff may be infinite. We ensure the finiteness of the repeated-game payoffs by introducing discounting of future payoffs relative to earlier payoffs. Such discounting can be an expression of time preference and/or uncertainty about the length of the game. We introduce the average discounted payoff as a convenience which normalizes the repeated-game payoffs to be "on the same scale" as the stage-game payoffs. |
URL |
http://www.virtualperfection.com/gametheory/Section5.2.html |
Home URL |
http://www.virtualperfection.com/gametheory/index.html |
