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A folk theorem with codes of conduct and communication

Author

Listed:
  • Juan I. Block

    (University of Cambridge)

  • David K. Levine

    (European University Institute
    Washington University in St. Louis)

Abstract

We study self-referential games in which players have the ability to commit to a code of conduct—a complete description of how they play and their opponents should play. Each player receives a private signal about each others’ code of conduct and their codes of conduct specify how to react to these signals. When only some players receive informative signals, players are allowed to communicate using public messages. Our characterization of the effect of communication on the equilibrium payoffs yields a folk theorem and players share their private information truthfully in equilibrium. We also provide an application of codes of conduct: games that are played through computer programs.

Suggested Citation

  • Juan I. Block & David K. Levine, 2017. "A folk theorem with codes of conduct and communication," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(1), pages 9-19, April.
    • Handle: RePEc:spr:etbull:v:5:y:2017:i:1:d:10.1007_s40505-016-0107-y
    DOI: 10.1007/s40505-016-0107-y
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    References listed on IDEAS

    as
    1. Levine, David K. & Pesendorfer, Wolfgang, 2007. "The evolution of cooperation through imitation," Games and Economic Behavior, Elsevier, vol. 58(2), pages 293-315, February.
    2. Tennenholtz, Moshe, 2004. "Program equilibrium," Games and Economic Behavior, Elsevier, vol. 49(2), pages 363-373, November.
    3. Kalai, Adam Tauman & Kalai, Ehud & Lehrer, Ehud & Samet, Dov, 2010. "A commitment folk theorem," Games and Economic Behavior, Elsevier, vol. 69(1), pages 127-137, May.
    4. Forges, Francoise, 1990. "Universal Mechanisms," Econometrica, Econometric Society, vol. 58(6), pages 1341-1364, November.
    5. Forges, Francoise M, 1986. "An Approach to Communication Equilibria," Econometrica, Econometric Society, vol. 54(6), pages 1375-1385, November.
    6. Myerson, Roger B, 1986. "Multistage Games with Communication," Econometrica, Econometric Society, vol. 54(2), pages 323-358, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Folk theorem; Self-referential game; Commitment; Communication;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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