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An algorithm for two-player repeated games with imperfect public monitoring

Author

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  • Jasmina Karabegovic

    (University of Graz, Austria)

Abstract

This paper introduces an explicit algorithm for computing perfect public equilibrium (PPE) payoffs in repeated games with imperfect public monitoring, public randomization, and discounting. The method adapts the established framework by Abreu, Pearce, and Stacchetti (1990) into a practical tool that balances theoretical accuracy with computational efficiency. The algorithm simplifies the complex task of identifying PPE payoff sets for any given discount factor. A stand-alone implementation of the algorithm can be accessed on GitHub (https://github.com/jasmina-karabegovic/IRGames).

Suggested Citation

  • Jasmina Karabegovic, 2024. "An algorithm for two-player repeated games with imperfect public monitoring," Graz Economics Papers 2024-15, University of Graz, Department of Economics.
    • Handle: RePEc:grz:wpaper:2024-15
    as

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    File URL: https://unipub.uni-graz.at/obvugrveroeff/download/pdf/10414075?originalFilename=true
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    References listed on IDEAS

    as
    1. Michihiro Kandori & Ichiro Obara, 2006. "Efficiency in Repeated Games Revisited: The Role of Private Strategies," Econometrica, Econometric Society, vol. 74(2), pages 499-519, March.
    2. Radner, Roy, 1985. "Repeated Principal-Agent Games with Discounting," Econometrica, Econometric Society, vol. 53(5), pages 1173-1198, September.
    3. Mailath, George J. & Samuelson, Larry, 2006. "Repeated Games and Reputations: Long-Run Relationships," OUP Catalogue, Oxford University Press, number 9780195300796.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • 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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