Communication and Cooperation in Repeated Games

34 Pages Posted: 9 Feb 2017  

Yu Awaya

University of Rochester

Vijay Krishna

Penn State University

Date Written: January 13, 2017

Abstract

We study the role of communication in repeated games with private monitoring. In such games, players receive only noisy private signals about each other's actions. For a fixed discount factor, we identify conditions under which there are equilibria with "cheap talk" that result in nearly efficient payoffs, whereas all equilibria without such communication are bounded away from this outcome. Thus, in our model, communication is necessary for cooperation.

Keywords: Comunication, Repeated Games, Private Monitoring

JEL Classification: C73, D43, D83

Suggested Citation

Awaya, Yu and Krishna, Vijay, Communication and Cooperation in Repeated Games (January 13, 2017). Available at SSRN: https://ssrn.com/abstract=2914062 or http://dx.doi.org/10.2139/ssrn.2914062

Yu Awaya

University of Rochester ( email )

280 Hutchison Road
Rochester, NY 14627
United States

Vijay Krishna (Contact Author)

Penn State University ( email )

Kern 516
University Park, PA 16802-3306
United States
814-863-8543 (Phone)
814-863-4775 (Fax)

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