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Gradualism and irreversibility
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UNSPECIFIED (2002) Gradualism and irreversibility. REVIEW OF ECONOMIC STUDIES, 69 (2). pp. 339-356. ISSN 0034-6527.
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Abstract
This paper considers a class of two-player dynamic games in which each player controls a one-dimensional action variable, interpreted as a level of cooperation. The dynamics are due to an irreversibility constraint: neither player can ever reduce his cooperation level. Payoffs are decreasing in one's own action, increasing in one's opponent's action. We characterize efficient symmetric equilibrium action paths; actions rise gradually over time and converge, when payoffs are smooth, to a level strictly below the one-shot efficient level, no matter how little discounting takes place. The analysis is extended to incorporate sequential moves and asymmetric equilibria.
Item Type: | Journal Article | ||||
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Subjects: | H Social Sciences > HC Economic History and Conditions | ||||
Journal or Publication Title: | REVIEW OF ECONOMIC STUDIES | ||||
Publisher: | REVIEW OF ECONOMIC STUDIES LTD | ||||
ISSN: | 0034-6527 | ||||
Official Date: | April 2002 | ||||
Dates: |
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Volume: | 69 | ||||
Number: | 2 | ||||
Number of Pages: | 18 | ||||
Page Range: | pp. 339-356 | ||||
Publication Status: | Published |
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