Repeated Games with Voluntary Information Purchase

János Flesch and Andrés Perea
Additional contact information
Andrés Perea: METEOR

No 57, Research Memoranda from Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization

Abstract: We consider discounted repeated games in which players can voluntarily purchase information about the opponents’ actions at past stages. Information about a stage can be bought at a fixed but arbitrary cost. Opponents cannot observe the information purchase by a player. For our main result, we make the usual assumption that the dimension of the set FIR of feasible and individually rational payoff vectors is equal to the number of players. We show that, if there are at least three players and each player has at least four actions, then every payoff vector in the interior of the set FIR can be achieved by a Nash equilibrium of the discounted repeated game if the discount factor is sufficiently close to 1. Therefore, nearly efficient payoffs can be achieved even if the cost of monitoring is high. We show that the same result holds if there are at least four players and at least three actions for each player. Finally, we indicate how the construction can be extended to sequential equilibrium.

Keywords: mathematical economics (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2007
View list of references

Downloads: (external link)
http://edocs.ub.unimaas.nl/loader/file.asp?id=1295 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:dgr:umamet:2007057

Access Statistics for this paper

More papers in Research Memoranda from Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization
Series data maintained by Willy Villevoye ().