Introduction to Repeated Games with Private Monitoring

Michihiro Kandori

No CIRJE-F-114, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: We present a brief overview of recent developments on discounted repeated games with (imperfect) private monitoring. The literature explores the possibility of cooperation in a long-term relationship, where each agent receives imperfect private information about the opponents' actions. Although this class of games admits a wide range of applications such as collusion under secret price-cutting, exchange of goods with uncertain quality, and observation errors, it has fairly complex mathematical structure due to the lack of common information shared by players. This is in sharp contrast to the well-explored case of repeated games under public information (with the celebrated Folk Theorems), and until recently little had been known about the private monitoring case. However, rapid developments in the past few years have revealed the possibility of cooperation under private monitoring for some class of games.

Pages: 18 pages
Date: 2001-05
New Economics Papers: this item is included in nep-gth and nep-mic
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Citations: View citations in EconPapers (5)

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Journal Article: Introduction to Repeated Games with Private Monitoring (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2001cf114

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