Belief free equilibria
AbstractThe repeated game literature studies long run/repeated interactions, aiming to understand how repetition may foster cooperation. Conditioning future behavior on past play is crucial in this endeavor. For most situations of interest a given player does not directly observe the actions chosen by other players and must rely on noisy signals he receives about those actions. This is typically incorporated into models by defining a monitoring structure, that is, a collection of probability distributions over the signals each player receives (one distribution for each action profile players may play). Although this is simply meant to capture the fact that players don.t directly observe the actions chosen by others, constructed equilibria often depend on players precisely knowing the distributions, somewhat unrealistic in most problems of interest. This paper aims to show the fragility of belief free equilibrium constructions when one adds shocks to the monitoring structure in repeated games.
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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 13-020.
Date of creation: 10 May 2013
Date of revision:
Repeated games; folk theorem; belief free; robustness;
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-22 (All new papers)
- NEP-GTH-2013-05-22 (Game Theory)
- NEP-HPE-2013-05-22 (History & Philosophy of Economics)
- NEP-MIC-2013-05-22 (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.:
- Kalai, Ehud & Samet, Dov & Stanford, William, 1988. "A Note on Reactive Equilibria in the Discounted Prisoner's Dilemma and Associated Games," International Journal of Game Theory, Springer, Springer, vol. 17(3), pages 177-86.
- George J. Mailath & Wojciech Olszewski, 2008.
"Folk Theorems with Bounded Recall under (Almost) Perfect Monitoring,"
PIER Working Paper Archive, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania
08-019, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Mailath, George J. & Olszewski, Wojciech, 2011. "Folk theorems with bounded recall under (almost) perfect monitoring," Games and Economic Behavior, Elsevier, Elsevier, vol. 71(1), pages 174-192, January.
- George Mailath & Wojciech Olszewski, 2008. "Folk theorems with Bounded Recall under(Almost) Perfect Monitoring," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 1462, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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