Truthful Equilibria in Dynamic Bayesian Games

76 Pages Posted: 21 Jan 2015

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: January 20, 2015

Abstract

This paper characterizes an equilibrium payoff subset for dynamic Bayesian games as discounting vanishes. Monitoring is imperfect, transitions may depend on actions, types may be correlated and values may be 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 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.

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 (January 20, 2015). Cowles Foundation Discussion Paper No. 1933R, Available at SSRN: https://ssrn.com/abstract=2552709 or http://dx.doi.org/10.2139/ssrn.2552709

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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