Blackwell's comparison of experiments and discounted repeated games

Galit Ashkenazi-Golan, Ehud Lehrer

Research output: Contribution to journalArticlepeer-review

Abstract

We consider a two-player discounted repeated game with private monitoring and free communication. We analyze two related types of information structures. In the first, each player observes a random signal that contains his own payoff with a positive probability. In this model we show how to support a rich set of payoffs as sequential equilibrium outcomes. In the second model the players observe only their own payoffs and a signal indicating whether the opponent observed his own. In this model the set of sequential equilibrium payoffs is characterized. The characterization uses an adaptation of Blackwell's partial order over information structures. When adapted to the framework of repeated games, this order draws a clear line between detectable and undetectable deviations, thereby enabling the characterization of equilibrium payoffs.

Original languageEnglish
Pages (from-to)163-194
Number of pages32
JournalGames and Economic Behavior
Volume117
DOIs
StatePublished - Sep 2019

Keywords

  • Discounted repeated games
  • Information matrix
  • Observable payoffs
  • Private monitoring
  • Sequential equilibrium

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