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Uniformly Strict Equilibrium for Repeated Games with Private Monitoring and Communication

Author

Listed:
  • Richard McLean

    (Rutgers University)

  • Ichiro Obara

    (UCLA)

  • Andrew Postlewaite

    (University of Pennsylvania)

Abstract

Cooperation through repetition is an important theme in game theory. In this regard, various celebrated \folk theorems" have been proposed for repeated games in increasingly more complex environments. There has, however, been insufficient attention paid to the robustness of a large set of equilibria that is needed for such folk theorems. Starting with perfect public equilibrium as our starting point, we study uniformly strict equilibria in repeated games with private monitoring and direct communication (cheap talk). We characterize the limit equilibrium payoff set and identify the conditions for the folk theorem to hold with uniformly strict equilibrium.

Suggested Citation

  • Richard McLean & Ichiro Obara & Andrew Postlewaite, 2023. "Uniformly Strict Equilibrium for Repeated Games with Private Monitoring and Communication," PIER Working Paper Archive 23-018, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    • Handle: RePEc:pen:papers:23-018
    as

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    File URL: https://economics.sas.upenn.edu/system/files/working-papers/23-0018%20PIER%20Paper%20Submission.pdf
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    References listed on IDEAS

    as
    1. Abreu, Dilip & Pearce, David & Stacchetti, Ennio, 1990. "Toward a Theory of Discounted Repeated Games with Imperfect Monitoring," Econometrica, Econometric Society, vol. 58(5), pages 1041-1063, September.
    2. repec:dau:papers:123456789/6102 is not listed on IDEAS
    3. Ely, Jeffrey C. & Valimaki, Juuso, 2002. "A Robust Folk Theorem for the Prisoner's Dilemma," Journal of Economic Theory, Elsevier, vol. 102(1), pages 84-105, January.
    4. Olivier Compte, 1998. "Communication in Repeated Games with Imperfect Private Monitoring," Econometrica, Econometric Society, vol. 66(3), pages 597-626, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Cheap Talk; Communication; Folk theorem; Private monitoring; Repeated games; Robustness; Strict Equilibrium;
    All these keywords.

    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
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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