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To authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-937X.2009.00539.x Byline: TAKAKO FUJIWARA-GREVE (1), MASAHIRO OKUNO-FUJIWARA (2) Abstract: Ordinary repeated games do not apply to real societies where one can cheat and escape from partners. We formulate a model of endogenous relationships that a player can unilaterally end and start with a randomly assigned new partner with no information flow. Focusing on two-person, two-action Prisoner's Dilemma, we show that the endogenous duration of partnerships generates a significantly different evolutionary stability structure from ordinary random matching games. Monomorphic equilibria require initial trust building, while a polymorphic equilibrium includes earlier cooperators than any strategy in monomorphic equilibria and is thus more efficient. This is due to the non-linearity of average payoffs. Author Affiliation: (1)Keio University (2)University of Tokyo Article History: First version received August 2006; final version accepted October 2008 (Eds.)

A refinement of undefeated equilibria avoids the problems posed by sequential equilibria that limit the usefulness of games of incomplete information, and an existence theorem on signalling games is provided. Difficulties in implementing the concept of forward induction are explained. The set of undefeated equilibria in continuous strategy set signalling games is shown to be non-empty, and proofs are presented.

Several conceptual points are made concerning communication in games of asymmetric information. Equilibrium refinements of Sender-Receiver cheap-talk games that are based on the concept of a putative equilibrium, and which rely on the presence of a rich language with literal meanings, are discussed. Three nested criteria are proposed: strong announcement-proofness, announcement-proofness, and weak announcement-proofness. Journal of Economic Literature Classification Number: 026.

We analyze the problem in which agents have non-public information and are to play an asymmetric information game. The agents may reveal some or all of their information to other agents prior to playing this game. Revelation is via exogenously specified certificate statements. The equilibria resulting from various revelation strategies are used to determine equilibrium revelation of information. Sufficient conditions are provided for complete revelation of all private information. A number of examples are provided illustrating when revelation will or will not occur in commonly analyzed games.

The current state of economics as a science is critically evaluated in view of its lack of emphasis on sociological and psychological factors. In particular, I argue that humans are embedded in social structures and that they choose actions taking account of the social contexts in which they live and the social interactions to which they belong. Preferences then should be considered not as exogenously given but as endogenously evolved, allowing for bounded rationality and psychological factors. I provide a brief sketch of the possible model formulation for a more desirable theory, invoking network theory and an indirect evolutionary approach. JEL classification numbers: A12, A13, B40. [ABSTRACT FROM AUTHOR]