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Coordination failure in repeated games with private monitoring

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  • Sugaya, Takuo
  • Takahashi, Satoru

Abstract

Players coordinate continuation play in repeated games with public monitoring. We investigate the robustness of such equilibrium behavior with respect to ex-ante small private-monitoring perturbations. We show that with full support of public signals, no perfect public equilibrium is robust if it induces a “regular” 2×2 coordination game in the continuation play. This regularity condition is violated in all belief-free equilibria. Indeed, with an individual full rank condition, every interior belief-free equilibrium is robust. We also analyze block belief-free equilibria and point out that the notion of robustness is sensitive to whether we allow for uninterpretable signals.

Suggested Citation

  • Sugaya, Takuo & Takahashi, Satoru, 2013. "Coordination failure in repeated games with private monitoring," Journal of Economic Theory, Elsevier, vol. 148(5), pages 1891-1928.
    • Handle: RePEc:eee:jetheo:v:148:y:2013:i:5:p:1891-1928
    DOI: 10.1016/j.jet.2013.07.017
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    Cited by:

    1. Harry Pei & Bruno Strulovici, 2021. "Robust Implementation with Costly Information," Papers 2112.06032, arXiv.org.
    2. Heller, Yuval, 2015. "Instability of Equilibria with Imperfect Private Monitoring," MPRA Paper 64468, University Library of Munich, Germany.
    3. repec:pra:mprapa:64485 is not listed on IDEAS
    4. Heller, Yuval, 2017. "Instability of belief-free equilibria," Journal of Economic Theory, Elsevier, vol. 168(C), pages 261-286.
    5. Yangbo Song & Mihaela Schaar, 2020. "Dynamic network formation with foresighted agents," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(2), pages 345-384, June.

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    More about this item

    Keywords

    Repeated game; Almost-public monitoring; Private monitoring; Belief-free equilibrium; Global game; Robustness;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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