Private monitoring with infinite histories

Christopher Phelan and Andrzej Skrzypacz

No 383, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: This paper develops new recursive methods for studying stationary sequential equilibria in games with private monitoring. We first consider games where play has occurred forever into the past and develop methods for analyzing a large class of stationary strategies, where the main restriction is that the strategy can be represented as a finite automaton. For a subset of this class, strategies which depend only on the players? signals in the last k periods, these methods allow the construction of all pure strategy equilibria. We then show that each sequential equilibrium in a game with infinite histories defines a correlated equilibrium for a game with a start date and derive simple necessary and sufficient conditions for determining if an arbitrary correlation device yields a correlated equilibrium. This allows, for games with a start date, the construction of all pure strategy sequential equilibria in this subclass.

Date: 2006
New Economics Papers: this item is included in nep-bec and nep-gth
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Private Monitoring with Infinite Histories (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:383

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