Communication in Dynastic Repeated Games: `Whitewashes' and `Coverups
AbstractWe ask whether communication can directly substitute for memory in dynastic repeated games in which short lived individuals care about the utility of their offspring who replace them in an infinitely repeated game. Each individual is unable to observe what happens before his entry in the game. Past information is therefore conveyed from one cohort to the next by means of communication. When communication is costless and messages are sent simultaneously, communication mechanisms or protocols exist that sustain the same set of equilibrium payoffs as in the standard repeated game. When communication is costless but sequential, the incentives to `whitewash' the unobservable past history of play become pervasive. These incentives to whitewash can only be countered if some player serves as a `neutral historian' who verifies the truthfulness of others' reports while remaining indifferent in the process. By contrast, when communication is sequential and (lexicographically) costly, all protocols admit only equilibria that sustain stage Nash equilibrium payoffs. We also analyze a centralized communication protocol in which history leaves a `footprint' that can only hidden by the current cohort by a unanimous `coverup'. We show that in this case only weakly renegotiation proof payoffs are sustainable in equilibrium.
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Bibliographic InfoPaper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~01-01-03.
Date of creation: 01 Nov 2000
Date of revision: 01 Jul 2001
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Postal: Georgetown University Department of Economics Washington, DC 20057-1036
Web page: http://econ.georgetown.edu/
Postal: Marcia Suss Administrative Officer Georgetown University Department of Economics Washington, DC 20057-1036
Other versions of this item:
- Luca Anderlini & Roger Lagunoff, 2005. "Communication in dynastic repeated games: ‘Whitewashes’ and ‘coverups’," Economic Theory, Springer, vol. 26(2), pages 265-299, 08.
- Luca Anderlini & Roger Lagunoff, 2001. " Communication in Dynastic Repeated Games: `Whitewashes' and `Coverups' ," Game Theory and Information 0107001, EconWPA.
- 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
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