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Less is more: an observability paradox in repeated games

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  • Michihiro Kandori

    ()

  • Ichiro Obara

    ()

Abstract

We present a repeated prisoners' dilemma game with imperfect public monitoring, which exhibits the following paradoxical feature: the equilibrium payoff set expands and asymptotically achieves full efficiency as the public signal becomes less sensitive to the hiden actions of the players.

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Bibliographic Info

Article provided by Springer in its journal International Journal of Game Theory.

Volume (Year): 34 (2006)
Issue (Month): 4 (November)
Pages: 475-493

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Handle: RePEc:spr:jogath:v:34:y:2006:i:4:p:475-493

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Related research

Keywords: Efficiency; Folk theorem; Garbling; Imperfect public monitoring; Prisoners’ dilemma; Repeated games; C72; C73; D80; D82;

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Michihiro Kandori & Ichiro Obara, 2003. "Efficiency in Repeated Games Revisited: The Role of Private Strategies," CIRJE F-Series CIRJE-F-255, CIRJE, Faculty of Economics, University of Tokyo.
  2. V. Bhaskar & Ichiro Obara, 2000. "Belief-Based Equilibria in the Repeated Prisoners' Dilemma with Private Monitoring," Econometric Society World Congress 2000 Contributed Papers 1330, Econometric Society.
  3. Ely, Jeffrey C. & Valimaki, Juuso, 2002. "A Robust Folk Theorem for the Prisoner's Dilemma," Journal of Economic Theory, Elsevier, vol. 102(1), pages 84-105, January.
  4. Fudenberg Drew & Levine David K., 1994. "Efficiency and Observability with Long-Run and Short-Run Players," Journal of Economic Theory, Elsevier, vol. 62(1), pages 103-135, February.
  5. Lehrer, Ehud, 1992. "On the Equilibrium Payoffs Set of Two Player Repeated Games with Imperfect Monitoring," International Journal of Game Theory, Springer, Springer, vol. 20(3), pages 211-26.
  6. Lehrer, Ehud, 1991. "Internal Correlation in Repeated Games," International Journal of Game Theory, Springer, Springer, vol. 19(4), pages 431-56.
  7. Drew Fudenberg & David K. Levine & Eric Maskin, 1994. "The Folk Theorem with Imperfect Public Information," Levine's Working Paper Archive 2058, David K. Levine.
  8. Kandori, Michihiro, 1992. "The Use of Information in Repeated Games with Imperfect Monitoring," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 59(3), pages 581-93, July.
  9. Sekiguchi, Tadashi, 1997. "Efficiency in Repeated Prisoner's Dilemma with Private Monitoring," Journal of Economic Theory, Elsevier, vol. 76(2), pages 345-361, October.
  10. Michihiro Kandori & Hitoshi Matsushima, 1998. "Private Observation, Communication and Collusion," Econometrica, Econometric Society, Econometric Society, vol. 66(3), pages 627-652, May.
  11. Piccione, Michele, 2002. "The Repeated Prisoner's Dilemma with Imperfect Private Monitoring," Journal of Economic Theory, Elsevier, vol. 102(1), pages 70-83, January.
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Citations

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Cited by:
  1. Michihiro Kandori & Ichiro Obara, 2006. "Efficiency in Repeated Games Revisited: The Role of Private Strategies," Econometrica, Econometric Society, Econometric Society, vol. 74(2), pages 499-519, 03.
  2. Alp Atakan & Mehmet Ekmekci, 2009. "Reputation in Long-Run Relationships," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1507, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. Ekmekci, Mehmet, 2011. "Sustainable reputations with rating systems," Journal of Economic Theory, Elsevier, vol. 146(2), pages 479-503, March.
  4. Kamada, Yuichiro & Kominers, Scott Duke, 2010. "Information can wreck cooperation: A counterpoint to Kandori (1992)," Economics Letters, Elsevier, vol. 107(2), pages 112-114, May.

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