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Repeated games with local monitoring and private communication

Author

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  • Marie Laclau

    (CNRS - Centre National de la Recherche Scientifique, PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract
I consider repeated games with local monitoring: each player observes his neighbors’ moves only. Hence, monitoring is private and imperfect. Communication is private: each player can send different (costless) messages to different players. The solution concept is perfect Bayesian equilibrium. I prove that a folk theorem holds if and only if each player has two neighbors. This extends the result of Ben-Porath and Kahneman (1996) to private communication, provided the existence of sequential equilibrium.
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Suggested Citation

  • Marie Laclau, 2016. "Repeated games with local monitoring and private communication," Working Papers hal-01285070, HAL.
    • Handle: RePEc:hal:wpaper:hal-01285070
    DOI: 10.1016/j.econlet.2013.05.002
    Note: View the original document on HAL open archive server: https://pse.hal.science/hal-01285070
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    References listed on IDEAS

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    1. Fudenberg, Drew & Tirole, Jean, 1991. "Perfect Bayesian equilibrium and sequential equilibrium," Journal of Economic Theory, Elsevier, vol. 53(2), pages 236-260, April.
    2. Ben-Porath, Elchanan & Kahneman, Michael, 1996. "Communication in Repeated Games with Private Monitoring," Journal of Economic Theory, Elsevier, vol. 70(2), pages 281-297, August.
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    5. Laclau, M., 2013. "Repeated games with local monitoring and private communication," Economics Letters, Elsevier, vol. 120(2), pages 332-337.
    6. Tristan Tomala, 2011. "Fault Reporting in Partially Known Networks and Folk Theorems," Operations Research, INFORMS, vol. 59(3), pages 754-763, June.
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    9. Drew Fudenberg & David Levine & Eric Maskin, 2008. "The Folk Theorem With Imperfect Public Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 12, pages 231-273, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Laclau, M., 2013. "Repeated games with local monitoring and private communication," Economics Letters, Elsevier, vol. 120(2), pages 332-337.
    2. Fainmesser, Itay P. & Goldberg, David A., 2018. "Cooperation in partly observable networked markets," Games and Economic Behavior, Elsevier, vol. 107(C), pages 220-237.
    3. Bo Chen & Bin Zhang & Hua-qing Wu, 2015. "Misreporting behaviour in iterated prisoner's dilemma game with combined trust strategy," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(1), pages 31-43, January.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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