Takahashi (2010) [12] proves a folk theorem in an environment where a continuum of players are randomly matched in each period to play the prisoner's dilemma with a different partner. A key assumption there is that a player can observe her partner's past play without any cost, while she cannot...

This paper studies contagious equilibrium in infinitely repeated matching games. The innovation is to identify a key statistic of contagious punishment that, used together with a recursive formulation, generates tractable closed-form expressions for continuation payoffs, off equilibrium. This...

Individuals are randomly matched to play a <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$2\times 2$$</EquationSource> <EquationSource Format="MATHML"> <math xmlns:xlink="http://www.w3.org/1999/xlink"> <mrow> <mn>2</mn> <mo>×</mo> <mn>2</mn> </mrow> </math> </EquationSource> </InlineEquation> coordination game where the Pareto efficient and risk dominant equilibria differ. Players choose strategies by imitating the strategy of the most successful individual they observe. So, while individuals interact globally,...</equationsource></equationsource></inlineequation>

This paper studies the possibility of cooperation based on players' preferences. Consider the following infinitely repeated game, similar to Ghosh and Ray (1996). At each stage, uncountable numbers of players are randomly matched without information about their partners' past actions and play a...