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Efficiency in repeated games with local interaction and uncertain local monitoring

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  • Nava, Francesco
  • Piccione, Michele

Abstract

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.

Suggested Citation

  • Nava, Francesco & Piccione, Michele, 2012. "Efficiency in repeated games with local interaction and uncertain local monitoring," LSE Research Online Documents on Economics 54250, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:54250
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    File URL: http://eprints.lse.ac.uk/54250/
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    References listed on IDEAS

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    Cited by:

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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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