Toward a Theory of Discounted Repeated Games with Imperfect Monitoring

Dilip Abreu, David G. Pearce and Ennio Stacchetti
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Dilip Abreu: Cowles Foundation, Yale University, https://cowles.yale.edu/
David G. Pearce: Cowles Foundation, Yale University, https://cowles.yale.edu/

No 791, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: This paper investigates pure strategy sequential equilibria of repeated games with imperfect monitoring. The approach emphasizes the equilibrium value set and the static optimization problems embedded in external equilibria. We characterize these equilibria, and provide computational and comparative statics results. The "self-generation" and "bang-bang" propositions which were at the core of our analysis of optimal cartel equilibria [2], are generalized to asymmetric games and infinite action spaces. New results on optimal implicit reward functions include the necessity (as opposed to sufficiency) of bang-bang functions, and the nature of optimal punishment regions.

Keywords: Pure strategy sequential equilibria; repeated games; imperfect monitoring (search for similar items in EconPapers)
Pages: 34 pages
Date: 1986-04
Note: CFP 762.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Econometrica (September 1990), 58(5): 1041-1063

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Persistent link: https://EconPapers.repec.org/RePEc:cwl:cwldpp:791

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