Individual Learning and Cooperation in Noisy Repeated Games

Yuichi Yamamoto ()
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Yuichi Yamamoto: Department of Economics, University of Pennsylvania

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: We investigate whether two players in a long-run relationship can maintain cooperation when the details of the underlying game are unknown. Specifically, we consider a new class of repeated games with private monitoring, where an unobservable state of the world influences the payoff functions and/or the monitoring structure. Each player privately learns the state over time but cannot observe what the opponent learned. We show that there are robust equilibria in which players eventually obtain payoffs as if the true state were common knowledge and players played a “belief-free†equilibrium. We also provide explicit equilibrium constructions in various economic examples

Keywords: repeated game; private monitoring; incomplete information; belief-free equilibrium; ex-post equilibrium; individual learning (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
Pages: 78 pages
Date: 2013-07-06
New Economics Papers: this item is included in nep-cta, nep-gth, nep-hpe and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:13-038

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