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The Folk Theorem With Inperfect Public Information

Author

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  • FUDENBERG, D.
  • LEVINE, D.K.
  • MASKIN, E.

Abstract

We study repeated games in which players observe a public outcome that imperfectly signals the actions played. We provide conditions guaranteeing that any feasible, individually rational payoff vector of the stage game can arise as a perfect equilibrium of the repeated game with sufficiently little discounting. The central condition requires that there exist action profiles with the property that, for any two players, no two deviations—one by each player—give rise to the same probability distribution over public outcomes. The results apply to principal-agent, partnership, oligopoly, and mechanismdesign models, and to one-shot games with transferable utilities.
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Suggested Citation

  • Fudenberg, D. & Levine, D.K. & Maskin, E., 1989. "The Folk Theorem With Inperfect Public Information," Working papers 523, Massachusetts Institute of Technology (MIT), Department of Economics.
  • Handle: RePEc:mit:worpap:523
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    References listed on IDEAS

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    1. Radner, Roy, 1985. "Repeated Principal-Agent Games with Discounting," Econometrica, Econometric Society, vol. 53(5), pages 1173-1198, September.
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    More about this item

    Keywords

    information ; game theory ; economic models;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General

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