Cooperation and Effective Computability

Abstract

A common interest game is a game in which there exists a unique pair of payoffs which strictly Pareto dominates all other payoffs. The authors consider the undiscounted repeated game obtained by the infinite repetition of such a two-player stage game. They show that, if supergame strategies are restricted to be computable within Church's thesis, the only pair of payoffs that survives any computable tremble with sufficiently large support is the Pareto-efficient pair. The result is driven by the ability of the players to use the early stages of the game to communicate their intention to play cooperatively in the future. Copyright 1995 by The Econometric Society.

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