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Introduction to Repeated Games with Private Monitoring

  • Kandori, Michihiro

We present a brief overview of recent developments on discounted repeated games with (imperfect) private monitoring. The literature explores the possibility of cooperation in a long-term relationship, where each agent receives imperfect private information about the opponents' actions. Although this class of games admits a wide range of applications such as collusion under secret price-cutting, exchange of goods with uncertain quality, and observation errors, it has fairly complex mathematical structure due to the lack of common information shared by players. This is in sharp contrast to the well-explored case of repeated games under public information (with the celebrated Folk Theorems), and until recently little had been known about the private monitoring case. However, rapid developments in the past few years have revealed the possibility of cooperation under private monitoring for some class of games.

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 102 (2002)
Issue (Month): 1 (January)
Pages: 1-15

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Handle: RePEc:eee:jetheo:v:102:y:2002:i:1:p:1-15
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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  1. George J. Mailath & Stephen Morris, 1999. "Repeated Games with Almost-Public Monitoring," Cowles Foundation Discussion Papers 1236, Cowles Foundation for Research in Economics, Yale University.
  2. Sekiguchi, Tadashi, 1997. "Efficiency in Repeated Prisoner's Dilemma with Private Monitoring," Journal of Economic Theory, Elsevier, vol. 76(2), pages 345-361, October.
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  6. Ben-Porath, Elchanan & Kahneman, Michael, 1996. "Communication in Repeated Games with Private Monitoring," Journal of Economic Theory, Elsevier, vol. 70(2), pages 281-297, August.
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  12. Compte, Olivier, 2002. "On Failing to Cooperate When Monitoring Is Private," Journal of Economic Theory, Elsevier, vol. 102(1), pages 151-188, January.
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  15. Radner, Roy, 1986. "Repeated Partnership Games with Imperfect Monitoring and No Discounting," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 43-57, January.
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  18. repec:ner:tilbur:urn:nbn:nl:ui:12-88790 is not listed on IDEAS
  19. Michihiro Kandori & Hitoshi Matsushima, 1997. "Private observation and Communication and Collusion," Levine's Working Paper Archive 1256, David K. Levine.
  20. V. Bhaskar & Ichiro Obara, 2000. "Belief-Based Equilibria in the Repeated Prisoners' Dilemma with Private Monitoring," Econometric Society World Congress 2000 Contributed Papers 1330, Econometric Society.
  21. Piccione, Michele, 2002. "The Repeated Prisoner's Dilemma with Imperfect Private Monitoring," Journal of Economic Theory, Elsevier, vol. 102(1), pages 70-83, January.
  22. Aoyagi, Masaki, 2002. "Collusion in Dynamic Bertrand Oligopoly with Correlated Private Signals and Communication," Journal of Economic Theory, Elsevier, vol. 102(1), pages 229-248, January.
  23. Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-54, May.
  24. Bagwell, Kyle, 1995. "Commitment and observability in games," Games and Economic Behavior, Elsevier, vol. 8(2), pages 271-280.
  25. Michihiro Kandori & Hitoshi Matsushima, 1998. "Private Observation, Communication and Collusion," Econometrica, Econometric Society, vol. 66(3), pages 627-652, May.
  26. Dilip Abreu & David Pearce & Ennio Stacchetti, 2010. "Towards a Theory of Discounted Repeated Games with Imperfect Monitoring," Levine's Working Paper Archive 199, David K. Levine.
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