ENTREPRISES BEHAVIOR IN COOPERATIVE AND PUNISHMENT ‘S REPEATED NEGOTIATIONS

Our paper considers a “negotiation game” between two players which combines the features of two-players alternating offers bargaining and repeated games. Generally, the negotiation game admits a large number of equilibriums but some of which involve delay and inefficiency. Thus, complexity and bargaining in tandem may offer an explanation for cooperation and efficiency in repeated games. The Folk Theorem of repeated games is a very used result that shows that if players are enough patience, then it is possible to obtain a cooperative equilibrium of the infinite repeated game. By this paper, I demonstrate a new folk theorem for finitely repeated games and I also present the new found conditions (under stage number and minimum discount factor value) such that players cooperate at least one period in cooperative-punishment repeated games. Finally, I present a study-case for Cournot oligopoly situation for n enterprises behavior under finitely and infinitely repeated negotiations. In this case, I found that discount factor depends only on players number, not on different player’s payoffs.