Working Papers
By Year:
Paper #  Author  Title  

04032 
Rafael Rob Tadashi Sekiguchi 
"Reputation and Turnover"  
We consider a repeated duopoly game where each firm privately chooses its investment in quality, and realized quality is a noisy indicator of the firm's investment. We focus on dynamic reputation equilibria, whereby consumers 'discipline' a firm by switching to its rival in the case that the realized quality of its product is too low. This type of equilibrium is characterized by consumers' tolerance level  the level of product quality below which consumers switch to the rival firm  and firms' investment in quality. Given consumers' tolerance level, we determine when a dynamic equilibrium that gives higher welfare than the static equilibrium exists. We also derive comparative statics properties, and characterize a set of investment levels and, hence, payoffs that our equilibria sustain. Download Paper


01014 
George J. Mailath Ichiro Obara Tadashi Sekiguchi 
"The Maximum Efficient Equilibrium Payoff in the Repeated Prisoners' Dilemma"  
We describe the maximum efficient subgame perfect equilibrium payoff for a player in the repeated Prisoners' Dilemma, as a function of the discount factor. For discount factors above a critical level, every efficient, feasible, individually rational payoff profile can be sustained. For an open and dense subset of discount factors below the critical value, the maximum efficient payoff is not an equilibrium payoff. When a player cannot achieve this payoff, the unique equilibrium outcome achieving the best efficient equilibrium payoff for a player is eventually cyclic. There is an uncountable number of discount factors below the critical level such that the maximum efficient payoff is an equilibrium payoff. Download Paper


01009 
George J. Mailath Steven Matthews Tadashi Sekiguchi 
"Private Strategies in Finitely Repeated Games with Imperfect Public Monitoring"  
We present three examples of finitely repeated games with public monitoring that have sequential equilibria in private strategies, i.e., strategies that depend on own past actions as well as public signals. Such private sequential equilibria can have features quite unlike those of the more familiar perfect public equilibria: (i) making a public signal less informative can create Pareto superior equilibrium outcomes; (ii) the equilibrium finalperiod action profile need not be a stage game equilibrium; and (iii) even if the stage game has a unique correlated (and hence Nash) equilibrium, the firstperiod action profile need not be a stage game equilibrium. Download Paper
