finitely repeated game real life example

This is more of a rule than an exception: in a staged game, the Nash equilibrium is the only result that an agent can consistently acquire in an interaction, and it is usually inefficient for them. In other words, in the pricing competition game, the only Nash equilibrium is inefficient (for gas stations) that both charge p = c. P = c, where their profit is zero, is the only price without this profit deviation. By modestly lowering the price, anyone can steal all of their competitors' consumers, doubling their revenues (nearly). Despite the fact that this is the best outcome for them, they are motivated to deviate. Assume that when they both charge p = 10, their joint profit is maximized, resulting in a high profit for everyone. They compete by publicly posting pricing and have the same and constant marginal cost c (the wholesale price of gasoline). Examples of cooperation in finitely repeated gamesįor the real-life example of a repeated game, consider two gas stations that are adjacent to one another.Single stage game or single shot game are names for non-repeated games. Repeated games capture the idea that a player will have to take into account the impact of their current action on the future actions of other players this impact is sometimes called their reputation. The stage game is usually one of the well-studied 2-person games.

In game theory, a repeated game is an extensive form game that consists of a number of repetitions of some base game (called a stage game).

Finitely repeated game real life example