We characterize stochastically stable states in noisy asynchronous repeated games. Players repeatedly play a 2 × 2 coordination game with random pairwise matching. The games are noisy because the players may make mistakes when choosing their actions and are asynchronous because only one player can move in each period. We show that if there is a sufficiently patient player, the efficient state c...

We study a duopoly model of investment, in which each player learns about the quality of a common value project by observing some public background information, and possibly the experience of his rival. Investment costs are private information, and the background signal takes the form of a Poisson process conditional on the quality of the project being low. The resulting attrition game has a un...

This paper extends the belief-based approach to repeated prisoners' dilemma with asymmetric private monitoring. We rst nd that the previous belief-based techniques (Sekiguchi (1997), Bhaskar and Obara (2002)) cannot succeed when players' private monitoring technologies are su ciently di erent. We then modify the previous belief-based approach by letting the player with smaller observation error...

This paper studies a dynamic adjustment process in a large society of forward-looking agents where payoffs are given by a normal form supermodular game. The stationary states of the dynamics correspond to the Nash equilibria of the stage game. It is shown that if the stage game has a monotone potential maximizer, then the corresponding stationary state is uniquely linearly absorbing and globall...

This paper analyzes repeated games with private monitoring, where in each period each player receives a signal of the other player's action in the previous period, and that signal is private information. Previous literature on discounted repeated games with private monitoring has not shown whether or not (nearly) efficient equilibria exist. For a repeated prisoner's dilemma satisfying a certain...

We present three examples of finitely repeated games with public monitoring that have sequential equilibria in private strategies, i.e., strategies that depend on own past actions as well as public signals. Such private sequential equilibria can have features quite unlike those of the more familiar perfect public equilibria: (i) making a public signal less informative can create Pareto superior...

For several classes of reinforcement learning schemes, convergence to action profiles that are not Nash equilibria may occur with positive probability under certain conditions on the payoff function. In this paper, we explore how an alternative reinforcement learning scheme, where the strategy of each agent is also perturbed by a strategy-dependent perturbation (or mutations) function, may excl...

This paper is the first to examine collusion at the extensive margin (whereby firms collude by avoiding entry into each other’s markets or territories). We demonstrate that such collusion offers distinct predictions for the role of multiple markets in sustaining collusion such as the use of proportionate response enforcement mechanisms, the possibilities of oligopolistic competition with a coll...

I examine a dynamic model of network formation in which individuals use reinforcement learning to choose their actions. Typically, economic models of network formation assume the entire network structure to be known to all individuals involved. The introduction of reinforcement learning allows us to relax this assumption. Q-learning is a reinforcement learning algorithm from the artificial inte...

In a model of evolution driven by con ict between societies more powerful states have an advantage. When the in uence of outsiders is small we show that this results in a tendency to hegemony. In a simple example in which institutions di er in their exclusiveness we nd that these hegemonies will be ine ciently extractive in the sense of having ine ciently high taxes, high compensation for state...