Repeated games have multiple equilibria, so reputation outcomes depend on historical accident

Evidence

The second weakness is that the strategies I sketch for the various participants are not the only credible ones. It follows that the outcome I describe is not the only viable one. There are other, equally credible, sets of strategies that result in outcomes which do not have this form of reputation acquisition, where transactions are not undertaken for a great many periods. In short, such repeated games possess more than one equilibrium outcome (see Fudenberg and Maskin 1986). There is therefore no guarantee that the one I have outlined will prevail. It is here that historical accidents may matter. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 1008

Categorization

• QUESTION: If multiple equilibria are possible and contingent, then the collapse into Hobbesian order in Saramago is not inevitable but path-dependent — worth exploring whether the doctor’s wife or the first blind man’s actions are the historical accidents that tip the equilibrium.