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Using or hiding private information? An experimental study of zero-sum repeated games with incomplete information

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  • Jacquemet, Nicolas
  • Koessler, Frédéric

Abstract

This paper studies the value of private information in strictly competitive interactions in which there is a trade-off between (i) the short-run gain of using information, and (ii) the long-run gain of concealing it. We implement simple examples from the class of zero-sum repeated games with incomplete information. While the empirical value of information does not always coincide with the theoretical prediction, the qualitative properties of the value of information are satisfied in the laboratory: (i) it is never negative, (ii) it decreases with the number of repetitions, (iii) it is bounded below by the value of the infinitely repeated game, and (iv) it is bounded above by the value of the one-shot game. In line with the theory, the empirical use of private information is almost complete when it should be, and decreases in longer interactions.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 78 (2013)
Issue (Month): C ()
Pages: 103-120

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Handle: RePEc:eee:gamebe:v:78:y:2013:i:c:p:103-120

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Web page: http://www.elsevier.com/locate/inca/622836

Related research

Keywords: Concealment of information; Laboratory experiments; Value of information; Zero-sum repeated games;

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