Article ID: | iaor20131250 |
Volume: | 42 |
Issue: | 1 |
Start Page Number: | 295 |
End Page Number: | 303 |
Publication Date: | Feb 2013 |
Journal: | International Journal of Game Theory |
Authors: | Fujishige Satoru, Chen Bo |
Keywords: | Pareto front |
We provide a novel characterization of the feasible payoff set of a general two‐player repeated game with unequal discounting. In particular, we show that generically the Pareto frontier shifts outwards and the feasible payoff set expands in the sense of set inclusion, as the time horizon increases. This result reinforces and refines the insight in Lehrer and Pauzner (1999) by showing that a longer horizon enables the players to conduct intertemporal trade in a more flexible fashion.