TRIGGER STRATEGY

A 'trigger strategy' is a class of strategies employed in a repeated non-cooperative game. A player utilizing a trigger strategy initially cooperates but punishes the opponent if a certain level of defection (i.e., the trigger) is observed. The level of punishment and the sensitivity of the trigger vary with different trigger strategies.

Contents

Trigger strategies

Trigger strategies

★ Tit for Tat (the punishment continues as long as the other player defects)

★ Tit for Two Tats (a more forgiving variant of tit for tat)

★ Grim trigger (the punishment continues indefinitely after the other player defects just once)
;Textbooks and general reference texts

★ Vives, X. (1999) ''Oligopoly pricing'', MIT Press, Cambridge MA (readable; suitable for advanced undergraduates.)

★ Tirole, J. (1988) ''The Theory of Industrial Organization'', MIT Press, Cambridge MA (An organized introduction to industrial organization)
;Classical paper on this subject

★ Friedman, J. (1971). A non-cooperative equilibrium for supergames, Review of Economic Studies 38, 1-12. (The first formal proof of the Folk theorem (game theory)).