Template-Type: ReDIF-Paper 1.0
Author-Name: Burkhard Schipper
Author-Name-First: Burkhard
Author-Name-Last: Schipper
Author-Workplace-Name: Department of Economics, University of California Davis
Title: Strategic Control of Myopic Best Reply in Repeated Games
Abstract: How can a rational player strategically control a myopic best reply player in a repeated two-player game? We show that in games with strategic substitutes or strategic complements the optimal control strategy is monotone in the initial action of the opponent, in time periods, and in the discount rate. As an interesting example outside this class of games we present a repeated "textbook-like" Cournot duopoly with non-negative prices and show that the optimal control strategy involves a cycle.
Length: 24
File-URL: https://repec.dss.ucdavis.edu/files/iyUZrdLg6SgRHiJycJ9HuYx8/11-5.pdf
File-Format: application/pdf
Number: 284
Classification-JEL: C70, C72
KeyWords: Strategic teaching, learning, adaptive heuristics, dynamic optimization, strategic substitutes, strategic complements, myopic players
Creation-Date: 20110405
Handle: RePEc:cda:wpaper:284