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Using or Hiding Private Information? An Experimental Study of Zero-Sum Repeated Games with Incomplete Information

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  • Nicolas Jacquemet

    () (PSE - Paris School of Economics, BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Frédéric Koessler

    (PSE - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris)

Abstract

This paper studies the value of private information in strictly competitive interactions in which there is a trade-off between (i) the short-run gain of using information, and (ii) the long-run gain of concealing it. We implement simple examples from the class of zero-sum repeated games with incomplete information. While the empirical value of information does not always coincide with the theoretical prediction, the qualitative properties of the value of information are satisfied in the laboratory: (i) it is never negative, (ii) it decreases with the number of repetitions, (iii) it is bounded below by the value of the infinitely repeated game, and (iv) it is bounded above by the value of the one-shot game. In line with the theory, the empirical use of private information is almost complete when it should be, and decreases in longer interactions.

Suggested Citation

  • Nicolas Jacquemet & Frédéric Koessler, 2013. "Using or Hiding Private Information? An Experimental Study of Zero-Sum Repeated Games with Incomplete Information," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-00773412, HAL.
  • Handle: RePEc:hal:pseose:halshs-00773412
    DOI: 10.1016/j.geb.2012.12.002
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00773412
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    References listed on IDEAS

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    Cited by:

    1. Laurent Denant-Boemont & Olivier L’Haridon, 2013. "La rationalité à l'épreuve de l'économie comportementale," Revue française d'économie, Presses de Sciences-Po, vol. 0(2), pages 35-89.
    2. repec:eee:jeborg:v:150:y:2018:i:c:p:202-219 is not listed on IDEAS

    More about this item

    Keywords

    Concealment of information; Laboratory experiments; Value of information; Zero-sum repeated games;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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