Communication with tokens in repeated games on networks
AbstractA key obstacle to coordination and cooperation in many networked environments is that behavior in each bilateral relationship is not observable to individuals outside that relationship: that is, information is local. This paper investigates when players can use communication to replicate any outcome that would have been sustainable were this information public. A benchmark result is that if only cheap talk communication is possible then public information can only be replicated if the network is 2-connected: that is, if no player can prevent the flow of information to another. In contrast, the main result is that public information can always be replicated if in addition to cheap talk the players have access to undifferentiated tokens that can be freely transferred among neighbors (which bear some resemblance to certain models of fiat money). Sufficient conditions are provided for such tokens to expand the equilibrium payoff set, relative to what would be achievable without explicit communication or with cheap talk communication only.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Econometric Society in its journal Theoretical Economics.
Volume (Year): (Forthcoming)
Issue (Month): ()
Contact details of provider:
Web page: http://econtheory.org
Communication; networks; repeated games; tokens;
Find related papers by JEL classification:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
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.:
- Francis Bloch & Garance Genicot, 2005.
"Informal Insurance in Social Networks,"
2005 Meeting Papers
156, Society for Economic Dynamics.
- Francis Bloch (GREQAM and Universite de la Mediterranee), Garance Genicot (Georgetown University, and Debraj Ray (New York University and Instituto de Analisis Economico (CSIC)), 2004. "Informal Insurance in Social Networks," Working Papers gueconwpa~04-04-16, Georgetown University, Department of Economics.
- Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-54, August.
- Avinash Dixit, 2003. "Trade Expansion and Contract Enforcement," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1293-1317, December.
- Kocherlakota, Narayana R., 1998.
"Money Is Memory,"
Journal of Economic Theory,
Elsevier, vol. 81(2), pages 232-251, August.
- Rich McLean & Ichiro Obara & Andrew Postlewaite, 2005.
"Informational Smallness and Private Monitoring in Repeated Games,"
784828000000000261, UCLA Department of Economics.
- Richard McLean & Ichiro Obara & Andrew Postlewaite, 2001. "Informational Smallness and Private Monitoring in Repeated Games," PIER Working Paper Archive 05-024, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 20 Jul 2005.
- Olivier Compte, 1998. "Communication in Repeated Games with Imperfect Private Monitoring," Econometrica, Econometric Society, vol. 66(3), pages 597-626, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martin J. Osborne).
If references are entirely missing, you can add them using this form.