Strongly Symmetric Subgame Perfect Equilibria in Infinitely Repeated Games with Perfect Monitoring and Discounting

Abstract We provide a solution for the set of strongly symmetric subgame perfect equilibrium payoffs in infinitely repeated games with discounting and perfect monitoring. The solution is obtained by finding the largest scalar which solves a certain equation. This scalar is interpreted as the maximal level of deterrence in the game, where by deterrence we mean the difference between continuation payoffs either after an equilibrium action or after a deviation. Journal of Economic Literature Classification Number: C72.