Concepts of Solution in Repeated Games Norimasa Kobayashi

Concept of solutions and equilibria along with rationality of players in repeated games are re-examined in this essay. It is discussed that the reason for the intuitively robust players ’ strategies deviating from equilibria is not only due to their bounded rationality in ordinary sense. Interpretation of deviation is thus crucial to the outcome of games. One of the possibilities that may give rational foundation to deviations from the equilibrium is the concept of -equilibrium. Two examples sup-porting the concept of -equilibrium are presented. One is chain-store games and another is repeated prisoners ’ dilemma (PD) games.