FINITE AUTOMATA EQUILIBRIA WITH DISCOUNTING

In this article we examine the structure of Nash equilibria for two-person infinitely repeated games with discounting where the strategy space is the set of finite automata. We assume that the complexity of a strategy enters the preferences of the players. In previous work it has been shown that in many cases the introduction of complexity in the preferences of the players implies significant restrictions on the set of equilibrium payoffs. We show that duplication of stage-game strategies makes some of these restrictions vacuous and fully restores the Folk Theorem when complexity costs are minimal. © 1992.