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Coordination Failure in Repeated Games with Almost-Public Monitoring

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Abstract

Some private-monitoring games, that is, games with no public histories, can have histories that are almost public. These games are the natural result of perturbing public-monitoring games towards private monitoring. We explore the extent to which it is possible to coordinate continuation play in such games. It is always possible to coordinate continuation play by requiring behavior to have bounded recall (i.e., there is a bound L such that in any period, the last L signals are sufficient to determine behavior). We show that, in games with general almost-public private monitoring, this is essentially the only behavior that can coordinate continuation play.

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  • George J. Mailath & Stephen Morris, 2004. "Coordination Failure in Repeated Games with Almost-Public Monitoring," Cowles Foundation Discussion Papers 1479R, Cowles Foundation for Research in Economics, Yale University, revised Mar 2005.
  • Handle: RePEc:cwl:cwldpp:1479r
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    More about this item

    Keywords

    Repeated games; Private monitoring; Almost-public monitoring; Coordination; Bounded recall;
    All these keywords.

    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
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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