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Blackwell's comparison of experiments and discounted repeated games

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  • Ashkenazi-Golan, Galit
  • Lehrer, Ehud

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.

Suggested Citation

  • Ashkenazi-Golan, Galit & Lehrer, Ehud, 2019. "Blackwell's comparison of experiments and discounted repeated games," Games and Economic Behavior, Elsevier, vol. 117(C), pages 163-194.
    • Handle: RePEc:eee:gamebe:v:117:y:2019:i:c:p:163-194
    DOI: 10.1016/j.geb.2019.06.003
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    1. Ashkenazi-Golan, Galit & Tsodikovich, Yevgeny & Viossat, Yannick, 2023. "I want to tell you? Maximizing revenue in first-price two-stage auctions," LSE Research Online Documents on Economics 118706, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Discounted repeated games; Observable payoffs; Private monitoring; Information matrix; Sequential equilibrium;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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