Title: Bounding equilibrium payoffs in repeated games with private monitoring
Abstract: We provide a simple suffi cient condition for the existence of a recursive upper bound on (the Pareto frontier of) the sequential equilibrium payoff set at a fixed discount factor in two-player repeated games with imperfect private monitoring. The bounding set is the sequential equilibrium payoff set with perfect monitoring and a mediator. We show that this bounding set admits a simple recursive characterization, which nonetheless necessarily involves the use of private strategies. Under our condition, this set describes precisely those payoff vectors that arise in equilibrium for some private monitoring structure, if either non-stationary monitoring or communication is allowed. ∗This replaces our earlier paper, “Perfect Versus Imperfect Monitoring in Repeated Games.” For helpful comments, we thank Dilip Abreu, Gabriel Carroll, Henrique de Oliveira, Glenn Ellison, Drew Fudenberg, Michihiro Kandori, George Mailath, Hitoshi Matsushima, Stephen Morris, Ilya Segal, Tadashi Sekiguchi, Andrzej Skrzypacz, Satoru Takahashi, Juuso Toikka, Thomas Wiseman, the anonymous referees, and participants in several seminars.
Publication Year: 2017
Publication Date: 2017-05-01
Language: en
Type: book-chapter
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Cited By Count: 1
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