Blackwell's comparison of experiments and discounted repeated games

Galit Ashkenazi-Golan and Ehud Lehrer

Games and Economic Behavior, 2019, vol. 117, issue C, 163-194

Abstract: We consider a two-player discounted repeated game with private monitoring and free communication. We analyze two related types of information structures. In the first, each player observes a random signal that contains his own payoff with a positive probability. In this model we show how to support a rich set of payoffs as sequential equilibrium outcomes. In the second model the players observe only their own payoffs and a signal indicating whether the opponent observed his own. In this model the set of sequential equilibrium payoffs is characterized. The characterization uses an adaptation of Blackwell's partial order over information structures. When adapted to the framework of repeated games, this order draws a clear line between detectable and undetectable deviations, thereby enabling the characterization of equilibrium payoffs.

Keywords: Discounted repeated games; Observable payoffs; Private monitoring; Information matrix; Sequential equilibrium (search for similar items in EconPapers)
JEL-codes: C44 C73 D83 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:117:y:2019:i:c:p:163-194

DOI: 10.1016/j.geb.2019.06.003

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