Abstract
I study two-player, infinitely repeated games with no discounting. I examine how perturbations afford players opportunities to establish reputations and I determine how potential reputations lead to outcome selection in both equilibrium and non-equilibrium settings. The main result is the following. Assume that players have beliefs of countable support, players only adopt “forgiving strategies,” and players best-respond to their beliefs. (A forgiving strategy does not punish an opponent forever.) Then if the game is perturbed, each player expects to fare at least as well as if she selected any of her perturbation strategies and the opponent played a best-response.Journal of Economic LiteratureClassification Numbers: C72, C73.
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