Repeated Game

Repeated Game

The repeated game refers to a situation whereby the same strategic form used in a game is repeated after every specific duration. Repeated games are also referred to as super games. It uses different strategies like the trigger strategies whereby the player using the plan ends up punishing the opponent despite first cooperating to take the mission. Repeated games can either be finite or infinite depending on the horizon. If the horizon is limited, the repeated game is said to be finite and infinite when the horizon is infinite. It, therefore, means that the players in infinite horizon games can play infinitely as opposed to players infinite horizon repeated games. Finite games have a repeated number of periods. It is said that if it has a unique Nash equilibrium, then it has a specific sub-game perfect Nash equilibrium.

Relating this to economics, the Nash equilibrium is a point in which an individual cannot receive any added benefit above what they get as a result of changing their activities or other their way of doing things in business. The Nash equilibrium assumes that other competitor’s in the business do not change their strategies. In an oligopoly market, it will refer to the equilibrium established when members know the strategies that competitors are using.

In a worker-employee relationship, it becomes more secure and manageable when they have an agreement of contract that dictates different times for different activities. The concept borrowed from the game is only workable when there is mutual trust between the employer and the employee. This is because the employee will be sure that his welfare is catered for and the employer, on the other hand, will be confident of continuity of work even without supervision. This will build morale in the worker, increase their productivity, and hence effective management.