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Indiana University Bloomington


The Kelley Advantage

The department is home to the authors of Managerial Economics and Business Strategy and Games and Information: An Introduction to Game Theory, two of the nation’s leading textbooks in the field.

Research and Publications

Journal Articles

Folk Theorems for the Observable Implications of Repeated Games

1992, Theory and Decision

Eric Bennett Rasmusen


 The fact that infinitely repeated games have many different equilibrium outcomes is known as the Folk Theorem. Previous versions of the Folk Theorem have characterized only the payoffs of the game. This paper shows that over a finite portion of an infinitely repeated game, the concept of perfect equilibrium imposes virtually no restrictions on observable behavior. The Prisoner's Dilemma is presented as an example and discussed in detail.


Rasmusen, Eric Bennett (1992), "Folk Theorems for the Observable Implications of Repeated Games," Theory and Decision, Vol. 32, March, 147-164.