Characterizing Belief-Free Review-Strategy Equilibrium Payoffs under ConditionalIndependence
AbstractThis paper proposes and studies a tractable subset of Nash equilibria, belief-free review-strategy equilibria, in repeated games with private monitoring. The payoff set of this class of equilibria is characterized in the limit as the discount factor converges to one for games where players observe statistically independent signals. As an application, we develop a simple sufficient condition for the existence of asymptotically efficient equilibria, and establish a folk theorem for N-player prisoner’s dilemma. All these results are robust to a perturbation of the signal distribution, and hence remain true even under almost-independent monitoring.
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Bibliographic InfoPaper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 12-005.
Length: 74 pages
Date of creation: 22 Feb 2012
Date of revision:
repeated game; private monitoring; conditional independence; belief-free review-strategy equilibrium; prisoner’s dilemma;
Find related papers by 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-08 (All new papers)
- NEP-CTA-2012-03-08 (Contract Theory & Applications)
- NEP-GTH-2012-03-08 (Game Theory)
- NEP-MIC-2012-03-08 (Microeconomics)
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.:
- Johannes Hörner & Wojciech Olszewski, 2006.
"The Folk Theorem for Games with Private Almost-Perfect Monitoring,"
Econometric Society, vol. 74(6), pages 1499-1544, November.
- Johannes Horner & Wojciech Olszewski, 2005. "The Folk Theorem for Games with Private, Almost-Perfect Monitoring," NajEcon Working Paper Reviews 172782000000000006, www.najecon.org.
- Hitoshi Matsushima, 2003.
"Repeated Games with Private Monitoring: Two Players,"
CIRJE-F-242, CIRJE, Faculty of Economics, University of Tokyo.
- Hitoshi Matsushima, 2004. "Repeated Games with Private Monitoring: Two Players," Econometrica, Econometric Society, vol. 72(3), pages 823-852, 05.
- Joseph E. Harrington & Andrzej Skrzypacz, 2011.
"Private Monitoring and Communication in Cartels: Explaining Recent Collusive Practices,"
American Economic Review,
American Economic Association, vol. 101(6), pages 2425-49, October.
- Joseph E. Harrington, Jr. & Andrzej Skrzypacz, 2009. "Private Monitoring and Communication in Cartels: Explaining Recent Collusive Practices," Economics Working Paper Archive 555, The Johns Hopkins University,Department of Economics.
- Michihiro Kandori & Hitoshi Matsushima, 1997. "Private observation and Communication and Collusion," Levine's Working Paper Archive 1256, David K. Levine.
- Jeffrey C. Ely & Johannes Hörner & Wojciech Olszewski, 2005.
"Belief-Free Equilibria in Repeated Games,"
Econometric Society, vol. 73(2), pages 377-415, 03.
- Ichiro Obara, 2005.
"Folk Theorem with Communication,"
UCLA Economics Online Papers
366, UCLA Department of Economics.
- Yuichi Yamamoto, 2012. "Individual Learning and Cooperation in Noisy Repeated Games," PIER Working Paper Archive 12-044, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
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