Kreps' Model of Repeated Games

Kreps' Model of Repeated Games analyzes how players interact over multiple rounds, shaping future behavior based on past actions. It shows that players can sustain cooperation or avoid defection through strategies that consider future consequences, such as punishing uncooperative moves. The model emphasizes that the prospect of future interactions influences present decisions, making cooperation more stable even when short-term incentives might favor defection. This framework helps explain behaviors in real-world situations like business negotiations, where ongoing relationships encourage honesty and collaboration.