Truthful Equilibria in Dynamic Bayesian Games

74 Pages Posted: 22 Dec 2013

See all articles by Johannes Horner

Johannes Horner

Yale University - Cowles Foundation

Satoru Takahashi

National University of Singapore (NUS) - Department of Economics

Nicolas Vieille

HEC Paris - Economics & Decision Sciences

Multiple version iconThere are 2 versions of this paper

Date Written: December 20, 2013

Abstract

This paper characterizes an equilibrium payoff subset for Markovian games with private information as discounting vanishes. Monitoring is imperfect, transitions may depend on actions, types be correlated and values interdependent. The focus is on equilibria in which players report truthfully. The characterization generalizes that for repeated games, reducing the analysis to static Bayesian games with transfers. With correlated types, results from mechanism design apply, yielding a folk theorem. With independent private values, the restriction to truthful equilibria is without loss, except for the punishment level; if players withhold their information during punishment-like phases, a “folk” theorem obtains also.

Keywords: Bayesian games, repeated games, folk theorem

JEL Classification: C72, C73

Suggested Citation

Horner, Johannes and Takahashi, Satoru and Vieille, Nicolas, Truthful Equilibria in Dynamic Bayesian Games (December 20, 2013). Cowles Foundation Discussion Paper No. 1933, Available at SSRN: https://ssrn.com/abstract=2370574

Johannes Horner (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

Satoru Takahashi

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

Nicolas Vieille

HEC Paris - Economics & Decision Sciences ( email )

Paris
France

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