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Folk theorems with bounded recall under (almost) perfect monitoring

  • Mailath, George J.
  • Olszewski, Wojciech

We prove the perfect-monitoring folk theorem continues to hold when attention is restricted to strategies with bounded recall and the equilibrium is essentially required to be strict. As a consequence, the perfect monitoring folk theorem is shown to be behaviorally robust under almost-perfect almost-public monitoring. That is, the same specification of behavior continues to be an equilibrium when the monitoring is perturbed from perfect to highly-correlated private.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 71 (2011)
Issue (Month): 1 (January)
Pages: 174-192

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Handle: RePEc:eee:gamebe:v:71:y:2011:i:1:p:174-192
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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