How Robust is the Folk Theorem with Imperfect Public Monitoring?∗
نویسندگان
چکیده
In this paper, we prove that, under full rank, every perfect public equilibrium payoff (above some Nash equilibrium in the two-player case, and above the minmax payoff with more players) can be achieved with strategies that have bounded memory. This result is then used to prove that feasible, individually rational payoffs (above some strict Nash equilibrium in the two-player case, and above the pure-strategy minmax payoff with more players) can be achieved under private but almost-public monitoring.
منابع مشابه
Is Full Compliance Possible? Conditions for Shirking with Imperfect Monitoring and Continuous Action Spaces
Games of public good provision, collective action, and collusion share concern for the free rider that shirks on its obligations. According to the folk theorem, the free rider problem can be resolved through punishment mechanisms. Versions of the folk theorem have been applied when monitoring is imperfect. Empirical evidence contradicts this theory: while often subjects cooperate significantly,...
متن کاملLess is more: an observability paradox in repeated games
We present a repeated prisoners’ dilemma game with imperfect public monitoring, which exhibits the following paradoxical feature: the (limit) equilibrium payoff set achieves full efficiency asymptotically as the public signal becomes insensitive to the hidden actions of the players. The basic logic behind this result also provides an example where the Folk theorem is obtained, while Fudenberg-L...
متن کاملThe folk theorem for irreducible stochastic games with imperfect public monitoring
In an irreducible stochastic game, no single player can prevent the stochastic process on states from being irreducible, so the other players can ensure that the current state has little effect on events in the distant future. This paper provides a sufficient condition for the folk theorem in irreducible stochastic games with imperfect public monitoring, thus generalizing the folk theorems of D...
متن کاملGeorge J . Mailath and Wojciech Olszewski “ Folk Theorems with Bounded Recall under ( Almost ) Perfect Monitoring ” Third Version PIER Working Paper 10 - 007
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 wh...
متن کاملPerfect Versus Imperfect Monitoring in Repeated Games
We show that perfect monitoring is not necessarily the optimal monitoring technology in repeated games, unless players are both patient and have access to a mediator who can condition her recommendations on the entire history of actions and recommendations. This claim follows from three results. First, players can be better o¤ with unmediated imperfect (public or private) monitoring than with m...
متن کامل