A REPEATED GAME WITH FINITELY LIVED OVERLAPPING GENERATIONS OF PLAYERS

This paper analyzes infinitely repeated noncooperative games where the players have finite but overlapping terms. Thus the nature of the game remains constant but the identity of the players changes over time. This type of scenario depicts the situation facing firm managers in regulated or oligopolistic environments. Despite finite lives which lead players to always choose opportunistic actions at the end of their careers, it is shown that there are equilibria where cooperative behavior emerges in this noncooperative setting. Further, a "folk theorem" result is obtained: any individually rational payoffs can be realized as a subgame perfect equilibrium. Journal of Economic Literature Classification Numbers: 022.026. © 1991.