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Cyclic Games: An Introduction and Some Examples

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Abstract

We introduce a model of a cyclic game. Designed to take advantage of the recurring nature of certain economic and social situations, a cyclic game differs from an extensive form game in that a cyclic game does not necessarily have an end. The same situations, although with different players, may be repeated infinitely often. We provide an example showing that, even though a cyclic game has, in a sense, perfect information, it may not have an equilibrium in pure strategies. We demonstrate existence of equilibrium and illustrate the application of our model to an oligopolistic industry. Journal of Economic Literature Classification Numbers: C72, C73, D43.

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Cited by (4)

Both authors are indebted to two anonymous referees for especially careful and helpful comments. Wooders is also indebted to Sonderforschungsbereich 303 for support during 1991 and 1992 when the first draft of this paper was completed; to the Social Sciences and Humanities Research Council of Canada for support; and to the Humboldt Foundations for a “Humboldt Forschingspreis fur Auslandische Geisteswissenschaftler” Research Award. This paper was presented to the Department of Economics at New York University; we thank the participants for their comments, and especially Roy Radner both for his comments during the seminar and for his written comments.

2

To whom correspondence should be addressed at Department of Economics, University of Warwick, Coventry CV4 7AL United Kingdom. E-mail: [email protected].

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