THE FOLK THEOREM WITH IMPERFECT PUBLIC INFORMATION

Drew Fudenberg, David Levine and Eric Maskin

Chapter 12 in A Long-Run Collaboration on Long-Run Games, 2008, pp 231-273 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractWe study repeated games in which players observe a public outcome that imperfectly signals the actions played. We provide conditions guaranteeing that any feasible, individually rational payoff vector of the stage game can arise as a perfect equilibrium of the repeated game with sufficiently little discounting. The central condition requires that there exist action profiles with the property that, for any two players, no two deviations—one by each player—give rise to the same probability distribution over public outcomes. The results apply to principal-agent, partnership, oligopoly, and mechanismdesign models, and to one-shot games with transferable utilities.

Keywords: Long-Run Players; Limit Games; Robustness; Equilibrium; Reputation Effects; Repeated Games (search for similar items in EconPapers)
JEL-codes: I10 (search for similar items in EconPapers)
Date: 2008
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Related works:
Journal Article: The Folk Theorem with Imperfect Public Information (1994)
Working Paper: The Folk Theorem with Imperfect Public Information (1994)
Working Paper: The Folk Theorem with Imperfect Public Information (1994)
Working Paper: THE FOLK THEOREM WITH INPERFECT PUBLIC INFORMATION (1989)
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