The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Repeated Games

  • Kandori Michihiro
Reference work entry


This article shows why self-interested agents manage to cooperate in a long-term relationship. When agents interact only once, they often have an incentive to deviate from cooperation. In a repeated interaction, however, any mutually beneficial outcome can be sustained in an equilibrium. This fact, known as the folk theorem, is explained under various information structures. This article also compares repeated games with other means to achieve efficiency, and briefly discusses the scope for potential applications.


Antitrust enforcement Bargaining Cartels Collusion Contract theory Cooperation and its evolution Correlated equilibrium Equilibrium selection Finite horizons Folk th Imperfect monitoring Infinite horizons Informal contracts International policy coordination Long-term relationships Mechanism design Multiple equilibria Perfect monitoring Private monitoring Public monitoring Repeated games Relational contracts Subgame perfect equilibrium Trigger strategy Uniqueness of equilibrium 

JEL Classifications

This is a preview of subscription content, log in to check access.


  1. Abreu, D., D. Pearce, and E. Stacchetti. 1990. Towards a theory of discounted repeated games with imperfect monitoring. Econometrica 58: 1041–1064.CrossRefGoogle Scholar
  2. Abreu, D., P. Dutta, and L. Smith. 1994. The folk theorem for repeated games: A NEU condition. Econometrica 62: 939–948.CrossRefGoogle Scholar
  3. Aumann, R. 1959. Acceptable points in general cooperative N-person games. In Contributions to the theory of games, ed. R.D. Luce and A.W. Tucker, vol. 4. Princeton: Princeton University Press.Google Scholar
  4. Axelrod, R. 1984. Evolution of cooperation. New York: Basic Books.Google Scholar
  5. Benoit, J.P., and V. Krishna. 1985. Finitely repeated games. Econometrica 53: 905–922.CrossRefGoogle Scholar
  6. Coase, R. 1937. The nature of the firm. Economica n.s. 4: 386–405.Google Scholar
  7. Compte, O. 1998. Communication in repeated games with imperfect private monitoring. Econometrica 66: 597–626.CrossRefGoogle Scholar
  8. Ely, J., and J. Valimaki. 2002. A robust folk theorem for the Prisoner’s Dilemma. Journal of Economic Theory 102: 84–105.CrossRefGoogle Scholar
  9. Friedman, J. 1971. A non-cooperative equilibrium for supergames. Review of Economic Studies 38: 1–12.CrossRefGoogle Scholar
  10. Fudenberg, D., and E. Maskin. 1986. The folk theorem in repeated games with discounting or with incomplete information. Econometrica 54: 533–554.CrossRefGoogle Scholar
  11. Fudenberg, D., D. Levine, and E. Maskin. 1994. The folk theorem with imperfect public information. Econometrica 62: 997–1040.CrossRefGoogle Scholar
  12. Hörner, J., and W. Olszewski. 2006. The folk theorem for games with private almost- perfect monitoring. Econometrica 74: 1499–1544.CrossRefGoogle Scholar
  13. Kandori, M., and H. Matsushima. 1998. Private observation, communication and collusion. Econometrica 66: 627–652.CrossRefGoogle Scholar
  14. Macaulay, S. 1963. Non-contractual relations in business: A preliminary study. American Sociological Review 28: 55–67.CrossRefGoogle Scholar
  15. Mailath, G., and S. Morris. 2002. Repeated games with imperfect private monitoring: Notes on a coordination perspective. Journal of Economic Theory 102: 189–228.CrossRefGoogle Scholar
  16. Mailath, G., and L. Samuelson. 2006. Repeated games and reputations: Long-run relationships. Oxford: Oxford University Press.CrossRefGoogle Scholar
  17. Matsushima, H. 2004. Repeated games with private monitoring: Two players. Econometrica 72: 823–852.CrossRefGoogle Scholar
  18. Pearce, D. 1990. Repeated games: Cooperation and rationality. In Advances in economic theory, ed. J. Laffont. Cambridge: Cambridge University Press.Google Scholar
  19. Rubinstein, A. 1979. Equilibrium in supergames with overtaking criterion. Journal of Economic Theory 21: 1–9.CrossRefGoogle Scholar
  20. Sannikov, Y. 2005. Games with imperfectly observable actions in continuous time. Berkeley: Mimeo, University of California.Google Scholar
  21. Sekiguchi, T. 1997. Efficiency in repeated Prisoner’s Dilemma with private monitoring. Journal of Economic Theory 76: 345–361.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Kandori Michihiro
    • 1
  1. 1.