Finitely repeated games with social preferences

A well—known result from the theory of finitely repeated games statesthat if the stage game has a unique equilibrium, then there is a uniquesubgame perfect equilibrium in the finitely repeated game in which theequilibrium of the stage game is being played in every period. Here Ishow that this result does in general not hold anymore if players havesocial preferences of the form frequently assumed in the recent literature,for example in the inequity aversion models of Fehr and Schmidt(1999) or Bolton and Ockenfels (2000). In fact, repeating the uniquestage game equilibrium may not be a subgame perfect equilibrium atall.[...]