What is Game Theory: Infinitely Long?

Game Theory: Infinitely Long is a mental model used for better thinking and decision-making.

How do you apply Game Theory: Infinitely Long?

To apply Game Theory: Infinitely Long, identify situations where this framework is relevant, then use it as a lens to evaluate your options and decisions. The model is most useful when combined with other complementary mental models.

What category does Game Theory: Infinitely Long fall under?

Game Theory: Infinitely Long falls under the Economics & Markets category of mental models. Other models in this category can be found on the Economics & Markets hub page.

Why is Game Theory: Infinitely Long important?

Game Theory: Infinitely Long is important because it provides a structured way to think about problems that would otherwise be approached with intuition alone. Understanding this model helps you avoid common reasoning errors and make better decisions.

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Mental models
Game Theory: Infinitely Long

Economics & Markets

Game Theory: Infinitely Long

Model #0691Category: Economics & MarketsDepth to apply:

4 min read

On this page

Core Idea
How to See It
How to Use It
Founders & Leaders
Connected Models
One Key Quote
Summary & Further Reading

Contents

1. Core Idea
2. How to See It
3. How to Use It
4. Founders & Leaders
5. Connected Models
6. One Key Quote
7. Summary & Further Reading

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·Economics & Markets

Section 1

Core Idea

When a game is repeated indefinitely (no known last period), the set of equilibria expands. In the one-shot prisoner's dilemma, defection dominates. In an infinitely repeated game, cooperation can be sustained if players value the future enough — the "shadow of the future" makes the threat of punishment credible. Folk theorems characterise the payoffs that can be achieved in equilibrium; typically any feasible, individually rational payoff is possible with the right strategies (e.g. tit-for-tat, grim trigger). For founders, the lesson is that long horizons enable cooperation: relationships, reputation, and repeated interaction change the game. Design for repeat play when you want cooperation.