A folk theorem for dynamic games

Vladimir Gaitsgory, Shmuel Nitzan*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)


This paper focuses on infinite horizon dynamic games satisfying the monotonicity property: the objective function of every player is increasing (decreasing) in the strategy of the other players. We prove that, when closed-loop strategies are allowed, the set of Nash equilibrium payoffs coincides with the set of individually rational feasible payoffs in the game which allows only open-loop strategies. The significance of this general result is demonstrated by illustrating its applicability to the study of dynamic duopolistic competition [Fershtman and Kamien (1987), Reynolds (1987)], dynamic voluntary provision of public goods [Fershtman and Nitzan (1991)] and competitive arms race [Van der Ploeg and De Zeeuw (1990)].

Original languageEnglish
Pages (from-to)167-178
Number of pages12
JournalJournal of Mathematical Economics
Issue number2
Publication statusPublished - 1994
Externally publishedYes


  • Dynamic games
  • Economic applications
  • Folk theorem


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