Nash and Perfect Equilibria of Discounted Repeated Games
Abstract The “perfect Folk Theorem” for discounted repeated games establishes that the sets of Nash and subgame-perfect equilibrium payoffs are equal in the limit as the discount factor δ tends to one. We provide conditions under which the two sets coincide before the limit is reached. That is, we show how to compute δ such that the Nash and perfect equilibrium payoffs of the δ-discounted game are identical for all δ> δ .