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...

We show that for many classes of symmetric two-player games, the simple decision rule \imitate-the-best" can hardly be beaten by any other decision rule. Weprovide necessary and sufficient conditions for imitation to be unbeatable and showthat it can only be beaten by much in games that are of...

Sick-pay is a common provision in labor contracts. It insures workersagainst a sudden loss of income due to unexpected absences andhelps them smooth consumption. Therefore, many governments findsick-pay socially desirable and choose to mandate its provision. Butsick-pay is not without its...