Renegotiation in the repeated Cournot model

Aramendia, Miguel; Larrea, Concepción; Ruiz, Luis M.

doi:10.1016/j.geb.2004.06.008

Cited by 10 publications

(3 citation statements)

References 10 publications

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“…One such refinement is renegotiation proofness. While renegotiation proofness implies that revision opportunities cannot increase collusion-since with revision opportunities players may not be able to credibly commit to the required punishment paths-weak renegotiation proofness, for example, has no bite in oligopoly games (Farrell 2000;Aramendia et al 2005). Another consideration is miscoordination, which could play an important role given the large number of possible equilibria in indefinitely repeated oligopoly games.…”

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confidence: 99%

Strategy revision opportunities and collusion

2018

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This paper studies whether and how strategy revision opportunities affect levels of collusion in indefinitely repeated two-player games. Consistent with standard theory, we find that such opportunities do not affect strategy choices, or collusion levels, if the game is of strategic substitutes. In games of strategic complements, by contrast, revision opportunities lead to more collusion. We discuss alternative explanations for this result.

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confidence: 99%

Strategy revision opportunities and collusion

2018

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“…Interestingly, the "average machine" seems to become slightly more cooperative in the case of Substitutes and slightly less cooperative in the case of Complements after a revision. While the former seems in line with standard renegotiation arguments (Farrell and Maskin, 1989;McCutcheon, 1997;Aramendia et al, 2005), the latter is not. This effect can also be seen in Figure 4.…”

Section: Strategy Revisions and One-shot Deviationsmentioning

confidence: 55%

Eliciting Strategies in Indefinitely Repeated Games of Strategic Substitutes and Complements

2016

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We introduce a novel method to elicit strategies in indefinitely repeated games and apply it to games of strategic substitutes and complements. We find that out of 256 possible unit recall machines (and 1024 full strategies) participants could use, only five machines are used more than 5 percent of the time. Those are "static Nash", "myopic best response", "Tit-for-Tat" and two "Nash reversion" strategies. We compare outcome data with "hot" treatments and find that the fact that we elicit strategies did not affect the path of play. We also discuss applications to IO literature and compare insights to previous literature on strategy elicitation mostly focused on the prisoner's dilemma.

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“…In the absence of one or another of these assumptions, merchants will never wish to fire an agent who has cheated, so agents will always cheat, and the equilibrium unravels. 3 But Greif himself tells us that switching agents was costly for the Maghribi merchants, and we shall argue that the assumption of multilateral (as opposed to bilateral) perfect information is not supported by the historical evidence. Indeed, the historical evidence makes it clear that although Maghribi merchants may have been able to monitor the actions of their own agents with considerable accuracy (justifying the assumption of bilateral perfect information), they did not directly observe the actions of other merchants' agents.…”

Section: Introductionmentioning

confidence: 79%

Enforcing Cooperation Among Medieval Merchants: The Maghribi Traders Revisited

Harbord¹

2006

SSRN Journal

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We revisit Greif's (1993) analysis of trade between the 11th-century Maghribi traders and present two different models which bring into play, in an essential way, historical features of the Maghribi's organization which had no role in Greif's own analysis. Our reformulation of the Maghribi's "punishment strategies" incorporates principal components of their actual historical practice and explains why they may have been necessary to sustain cooperation, especially in the presence of uncertainty or imperfect information. We also model "formal friendships," or trade through bilateral and multilateral partnerships, and predict the Maghribi's practice of providing agency services without pecuniary compensation. We are thus able to provide a richer and more accurate picture of how that organization facilitated trade between widely-dispersed traders in the absence of a reliable legal system to enforce merchant contracts. JEL Classification Numbers: C72, D23, J41, N75

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Renegotiation in the repeated Cournot model

Cited by 10 publications

References 10 publications

Strategy revision opportunities and collusion

Strategy revision opportunities and collusion

Eliciting Strategies in Indefinitely Repeated Games of Strategic Substitutes and Complements

Enforcing Cooperation Among Medieval Merchants: The Maghribi Traders Revisited

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