Repeated Games Where the Payoffs and Monitoring Structure Are Unknown
Drew Fudenberg, Yuichi Yamamoto
Econometrica · 2010 · Volume 78 · Issue 5
Abstract
This paper studies repeated games with imperfect public monitoring where the players are uncertain both about the payoff functions and about the relationship between the distribution of signals and the actions played. We introduce the concept of perfect public ex post equilibrium (PPXE), and show that it can be characterized with an extension of the techniques used to study perfect public equilibria. We develop identifiability conditions that are sufficient for a folk theorem; these conditions imply that there are PPXE in which the payoffs are approximately the same as if the monitoring structure and payoff functions were known. Finally, we define perfect type-contingently public ex post equilibria (PTXE), which allows players to condition their actions on their initial private information, and we provide its linear programming characterization.
Keywords
Repeated game, public monitoring, incomplete information, perfect public equilibrium, folk theorem, belief-free equilibrium, ex post equilibrium
Enable JavaScript for citation tools and additional paper interactions.