Infinitely repeated games

It has been brought to my attention that I have been using a different set-up for testing the grim-trigger strategy than what is used in your lecture notes, and that some of you may have gotten a bit confused by that. I apologize for any inconvenience this may have caused and have attached a note that explains that the method displayed in the lecture notes and the method used in my seminars are the same.

https://www.dropbox.com/s/1d5qsqnz79xd0k2/infinitely%20repeated%20games.pdf

The key Message is that calculating the PV of two strategies and comparing them to figure out whether the player want to deviate is the same as comparing the short run gain of deviating to the long run loss of deviating.

Siv-Elisabeth