Bayesian Repeated Games and Reputation

56 Pages Posted: 16 Apr 2014

See all articles by Francoise Forges

Francoise Forges

Université Paris Dauphine - CEREMADE; CESifo (Center for Economic Studies and Ifo Institute)

Antoine Salomon

Université Paris XIII Nord

Date Written: March 15, 2014

Abstract

Under appropriate assumptions (private values and uniform punishments), the Nash equilibria of a Bayesian repeated game without discounting are payoff-equivalent to tractable, completely revealing, equilibria and can be achieved as interim cooperative solutions of the initial Bayesian game. This characterization does not apply to discounted games with patient players. In a class of public good games, the set of Nash equilibrium payoffs of the undiscounted game can be empty, while limit (perfect Bayesian) Nash equilibrium payoffs of the discounted game, as players become infinitely patient, do exist. These equilibria share some features with the ones of multi-sided reputation models.

Keywords: Bayesian game, incentive compatibility, individual rationality, infinitely repeated game, private values, public good, reputation

JEL Classification: C73, C72, C71, D82, H41

Suggested Citation

Forges, Francoise and Salomon, Antoine, Bayesian Repeated Games and Reputation (March 15, 2014). Available at SSRN: https://ssrn.com/abstract=2425134 or http://dx.doi.org/10.2139/ssrn.2425134

Francoise Forges (Contact Author)

Université Paris Dauphine - CEREMADE ( email )

Place du Marechal de Lattre de Tassigny
Paris Cedex 16, 75775
France

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Antoine Salomon

Université Paris XIII Nord ( email )

Avenue Jean Baptiste Clement
Villetaneuse, Seine Saint Denis 93430
France

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