Cyclic Games: An Introduction and Some Examples

Received September 14,1995We introduce a model of a cyclic game. Designed to take advantage of the recur-ring nature of certain economic and social situations,a cyclic game differs from anextensive form game in that a cyclic game does not necessarily have an end. Thesame situations,although with different players,may be repeated infinitely often.We provide an example showing that,even though a cyclic game has,in a sense,perfect information,it may not have an equilibrium in pure strategies. We demon-strate existence of equilibrium and illustrate the application of our model to anoligopolistic industry.