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An Approximate Folk Theorem with Imperfect Private Information

In: A Long-Run Collaboration On Long-Run Games

Author

Listed:
  • DREW FUDENBERG

    (Department of Economics, Massachusetts Institute of Technology, Cambridge, Massachusetts, 02139, USA)

  • DAVID K. LEVINE

    (Department of Economics, University of California, Los Angeles, California, 90024, USA)

Abstract

This paper studies repeated games in which players are imperfectly informed about the uncertain consequences of their opponents stage game actions. We show that if the game is informationally connected, the set of sequential equilibrium payoffs includes the enforceable mutually punishable set, if the intertemporal criterion is (i) the lim inf time average, or (ii) the limit of ε-equilibria with discount factor δ, and ε → 0 as δ → 1. We also explore the link between these two criterion functions.

Suggested Citation

  • Drew Fudenberg & David K. Levine, 2008. "An Approximate Folk Theorem with Imperfect Private Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 14, pages 309-330, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789812818478_0014
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    References listed on IDEAS

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    9. Drew Fudenberg & Eric Maskin, 2008. "The Folk Theorem In Repeated Games With Discounting Or With Incomplete Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 11, pages 209-230, World Scientific Publishing Co. Pte. Ltd..
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    More about this item

    Keywords

    Long-Run Players; Limit Games; Robustness; Equilibrium; Reputation Effects; Repeated Games;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General

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