Folk Theorem

The name folk theorem refers to a family of results in game theory asserting that many outcomes can be sustained as equilibria when a game is repeated indefinitely. In a standard discounted repeated game, every feasible payoff vector that gives each player more than the player's minmax payoff can, under suitable hypotheses, be supported by an equilibrium that remains a Nash equilibrium after every possible history when the players are sufficiently patient. The result is called a "folk theorem" because versions of it circulated informally before definitive proofs appeared.