Approximate efficiency in repeated games with side-payments and correlated signals

, H. () and , ()
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, H.: School of Economics, Fudan University
,: School of Economics, Shanghai University of Finance and Economics

Theoretical Economics, 2016, vol. 11, issue 1

Abstract: Side-payments are common in many long-term relationships. We show that when players can exchange side-payments, approximate efficiency is achievable in any repeated game with private monitoring and communication, so long as the players can observe their own payoffs and are sufficiently patient, the efficient stage-game outcome is unique, and the signal distribution has full support. Unlike existing results in the literature, our result does not require deviations be statistically detectable.

Keywords: Repeated games; private monitoring; communication (search for similar items in EconPapers)
JEL-codes: C73 (search for similar items in EconPapers)
Date: 2016-01-30
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Citations: View citations in EconPapers (1)

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