July 2002
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OF THE DISSERTATION Three Essays on Repeated Games by Pedro Dal B Doctor of Philosophy in Economics University of California, Los Angeles, 2002 Professor David K. Levine, Chair This thesis consists of three chapters. The ...rst chapter analyzes the outcomes that can be supported in a society through reward and punishment schemes that operate through community enforcement (social norms). I consider a society of in...nitely long-lived and very patient agents that are randomly matched in pairs every period to play a given game. I ...nd that any mutually bene...cial outcome can be supported by a self-enforcing social norm under both perfect information and a simple local information system. These Folk Theorem results explain not only how social norms can provide incentives to forestall opportunistic behavior and support cooperation in a community but also how they can support outcomes characterized by inequality.