Managerial Economics and Strategy, 2/e

13.1 Repeated Games

In the previous chapter, we analyzed static games, in which firms compete only once. We now consider how firms change their strategies and how the game’s equilibrium changes if a static game is repeated. The static constituent game might be played just once, repeated a finite (and prespecified) number of times, or repeated indefinitely.1

1When we say that a game goes on indefinitely, we mean that the players do not anticipate a definite end point. Each period, the players believe that the game may be repeated in the next period.

Strategies and Actions in Dynamic Games

In both static and dynamic games, managers need to be able to describe and understand the game and predict the likely outcome so they can determine their best ...