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Equilibrium in Repeated Games
The point where players� strategies stabilize over repeated interactions, often leading to different outcomes than in one-shot games.
Implications
A concept in game theory where players in a repeated game reach a stable strategy profile that they continue to follow over multiple rounds, often leading to a predictable outcome, such as cooperation or competition, depending on the incentives and payoffs.
Example
Example: Two companies in a duopoly might reach an equilibrium in repeated games by consistently choosing not to engage in price wars, maintaining stable prices and market shares over time.
Related Terms
Different from one-shot games, where players only interact once, repeated games involve ongoing interactions that allow for strategy adjustments based on past behavior.
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