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Efficiency in repeated games with local interaction and uncertain local monitoring

  • Nava, Francesco

    ()

    (Economics Department, London School of Economics)

  • Piccione, Michele

    ()

    (Economics Department, London School of Economics)

Registered author(s):

    The paper discusses community enforcement in infinitely repeated, two-action games with local interaction and uncertain monitoring. Each player interacts with and observes only a fixed set of opponents, of whom he is privately informed. The main result shows that when beliefs about the monitoring structure have full support, efficiency can be sustained with sequential equilibria that are independent of the players' beliefs. Stronger results are obtained when only acyclic monitoring structures are allowed or players have unit discount rates. These equilibria satisfy numerous robustness properties.

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    File URL: http://econtheory.org/ojs/index.php/te/article/viewFile/20140279/10218/319
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    Article provided by Econometric Society in its journal Theoretical Economics.

    Volume (Year): 9 (2014)
    Issue (Month): 1 (January)
    Pages:

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    Handle: RePEc:the:publsh:1200
    Contact details of provider: Web page: http://econtheory.org

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    1. Takahashi, Satoru, 2010. "Community enforcement when players observe partners' past play," Journal of Economic Theory, Elsevier, vol. 145(1), pages 42-62, January.
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    7. Cho, Myeonghwan, 2011. "Public randomization in the repeated prisoner's dilemma game with local interaction," Economics Letters, Elsevier, vol. 112(3), pages 280-282, September.
    8. Ben-Porath, E. & Kahneman, M., 1993. "Communication in Repeated Games with Private Monitoring," Papers 15-93, Tel Aviv - the Sackler Institute of Economic Studies.
    9. McBride, Michael, 2006. "Imperfect monitoring in communication networks," Journal of Economic Theory, Elsevier, vol. 126(1), pages 97-119, January.
    10. Michi Kandori, 2010. "Social Norms and Community Enforcement," Levine's Working Paper Archive 630, David K. Levine.
    11. Myeonghwan Cho, 2014. "Cooperation in the repeated prisoner's dilemma game with local interaction and local communication," International Journal of Economic Theory, The International Society for Economic Theory, vol. 10(3), pages 235-262, 09.
    12. Glen Ellison, 2010. "Cooperation in the Prisoner's Dilemma with Anonymous Random Matching," Levine's Working Paper Archive 631, David K. Levine.
    13. Alexander Wolitzky, 2013. "Cooperation with Network Monitoring," Review of Economic Studies, Oxford University Press, vol. 80(1), pages 395-427.
    14. Mario Gilli, 1999. "On Non-Nash Equilibria," Levine's Working Paper Archive 2084, David K. Levine.
    15. Glenn Ellison, 1994. "Cooperation in the Prisoner's Dilemma with Anonymous Random Matching," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 567-588.
    16. Joyee Deb, 2008. "Cooperation and Community Responsibility: A Folk Theorem for Repeated Matching Games with Names," Working Papers 08-24, New York University, Leonard N. Stern School of Business, Department of Economics.
    17. Matthew O. Jackson & Tomas Rodriguez-Barraquer & Xu Tan, 2012. "Social Capital and Social Quilts: Network Patterns of Favor Exchange," American Economic Review, American Economic Association, vol. 102(5), pages 1857-97, August.
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