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Folk Theorems with Bounded Recall under (Almost) Perfect Monitoring, Third Version

Author

Listed:
  • George J. Mailath

    () (Department of Economics, University of Pennsylvania)

  • Wojciech Olszewski

    () (Department of Economics, Northwestern University)

Abstract

We prove the perfect-monitoring folk theorem continues to hold when attention is restricted to strategies with bounded recall and the equilibrium is essentially required to be strict. As a consequence, the perfect monitoring folk theorem is shown to be behaviorally robust under almost-perfect almost-public monitoring. That is, the same specification of behavior continues to be an equilibrium when the monitoring is perturbed from perfect to highly-correlated private.

Suggested Citation

  • George J. Mailath & Wojciech Olszewski, 2008. "Folk Theorems with Bounded Recall under (Almost) Perfect Monitoring, Third Version," PIER Working Paper Archive 10-007, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 02 Mar 2010.
  • Handle: RePEc:pen:papers:10-007
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    Cited by:

    1. Doraszelski, Ulrich & Escobar, Juan F., 2012. "Restricted feedback in long term relationships," Journal of Economic Theory, Elsevier, vol. 147(1), pages 142-161.

    More about this item

    Keywords

    Repeated games; bounded recall strategies; folk theorem; imperfect monitoring;

    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

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