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Title Repeated Games with Asymptotically Finite
Author Yves Guéron (Seoul National University)
Volume 35 Number 1
Pages 109-123 
Keywords Dynamic Games, Asymptotically Finite Horizon, Folk-theorem, Imperfect
Abstract We consider a two-player infinitely repeated game with asymptotically finite horizons:
discount factors converge to zero over time. The stage-game has a continuum of actions and
a unique and interior Nash equilibrium. It is known that when players perfectly observe
each others actions, cooperation can be achieved and equilibrium payoffs can be strictly
higher than the stage-game equilibrium payoff. We show that introducing an arbitrarily
small amount of smooth noise in the monitoring makes cooperation impossible and players
play the static Nash equilibrium of the stage-game forever.
File KER-20190101-35-1-04.pdf
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