Characterizing Belief-Free Review-Strategy Equilibrium Payoffs Under Conditional Independence

74 Pages Posted: 27 Feb 2012  

Yuichi Yamamoto

University of Pennsylvania; Harvard University

Date Written: February 22, 2012

Abstract

This paper proposes and studies a tractable subset of Nash equilibria, belief-free review-strategy equilibria, in repeated games with private monitoring. The payoff set of this class of equilibria is characterized in the limit as the discount factor converges to one for games where players observe statistically independent signals. As an application, we develop a simple sufficient condition for the existence of asymptotically efficient equilibria, and establish a folk theorem for N-player prisoner’s dilemma. All these results are robust to a perturbation of the signal distribution, and hence remain true even under almost-independent monitoring.

Keywords: repeated game, private monitoring, conditional independence, belief-free

JEL Classification: C72, C73, D82

Suggested Citation

Yamamoto, Yuichi, Characterizing Belief-Free Review-Strategy Equilibrium Payoffs Under Conditional Independence (February 22, 2012). PIER Working Paper No. 12-005. Available at SSRN: https://ssrn.com/abstract=2011773 or http://dx.doi.org/10.2139/ssrn.2011773

Yuichi Yamamoto (Contact Author)

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

Paper statistics

Downloads
19
Abstract Views
287