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Truthful Equilibria in Dynamic Bayesian Games

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  • Johannes Horner
  • Satoru Takahashi
  • Nicolas Vieille

Abstract

This paper characterizes an equilibrium payoff subset for dynamic Bayesian games as discounting vanishes. Monitoring is imperfect, transitions may depend on actions, types may be correlated, and values may be interdependent. The focus is on equilibria in which players report truthfully. The characterization generalizes that for repeated games, reducing the analysis to static Bayesian games with transfers. With independent private values, the restriction to truthful equilibria is without loss, except for the punishment level: if players withhold their information during punishment‐like phases, a folk theorem obtains.
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Suggested Citation

  • Johannes Horner & Satoru Takahashi & Nicolas Vieille, 2014. "Truthful Equilibria in Dynamic Bayesian Games," Levine's Working Paper Archive 786969000000000881, David K. Levine.
  • Handle: RePEc:cla:levarc:786969000000000881
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    References listed on IDEAS

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    1. Obara Ichiro, 2008. "The Full Surplus Extraction Theorem with Hidden Actions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-28, March.
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    6. Johannes Hörner & Takuo Sugaya & Satoru Takahashi & Nicolas Vieille, 2011. "Recursive Methods in Discounted Stochastic Games: An Algorithm for δ→ 1 and a Folk Theorem," Econometrica, Econometric Society, vol. 79(4), pages 1277-1318, July.
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    Citations

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    Cited by:

    1. He, Wei & Li, Jiangtao, 2016. "Efficient dynamic mechanisms with interdependent valuations," Games and Economic Behavior, Elsevier, vol. 97(C), pages 166-173.
    2. Chan, Jimmy & Zhang, Wenzhang, 2015. "Collusion enforcement with private information and private monitoring," Journal of Economic Theory, Elsevier, vol. 157(C), pages 188-211.
    3. Chan, Jimmy H. & Zhang, Wenzhang, 2016. "Approximate efficiency in repeated games with side-payments and correlated signals," Theoretical Economics, Econometric Society, vol. 11(1), January.
    4. Yuichi Yamamoto, 2015. "Stochastic Games with Hidden States," PIER Working Paper Archive 15-007, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    5. repec:eee:gamebe:v:104:y:2017:i:c:p:329-349 is not listed on IDEAS

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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