Asymptotic value of monitoring structures in stochastic games

Daehyun Kim () and Ichiro Obara ()
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Daehyun Kim: Department of Economics, UCLA
Ichiro Obara: Department of Economics, UCLA

Theoretical Economics, Forthcoming

Abstract: This paper studies how improved monitoring affects the limit equilibrium payoff set for stochastic games with imperfect public monitoring. We introduce a simple generalization of Blackwell garbling called weighted garbling in order to compare different monitoring structures for this class of games. Our main result is the monotonicity of the limit perfect public equilibrium (PPE) payoff set with respect to this information order. We show that the limit PPE payoff set expands when the monitoring structure gets more informative with respect to the weighted garbling order. We also show that a similar monotonicity holds for strongly symmetric equilibrium for symmetric stochastic games. Finally, we show that our weighted garbling order is useful to compare the limit PPE payoff set for different state transition laws and monitoring structures when the limit feasible payoff set is the same.

Keywords: Comparison of experiments; garbling; imperfect monitoring; monitoring structure; perfect public equilibrium; stochastic games (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
Date: 2025-11-08
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