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What you get is what you see: Cooperation in repeated games with observable payoffs

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  • Ashkenazi-Golan, Galit
  • Lehrer, Ehud

Abstract

We consider two-player repeated games, where the players observe their own payoffs with a positive probability. Typically, a player observes neither the other's actions nor her own payoffs. We show that when costly communication is available to the players and when they are patient enough, being aware of her own payoffs suffices to provide the players with any strictly efficient payoff by sequential equilibrium.

Suggested Citation

  • Ashkenazi-Golan, Galit & Lehrer, Ehud, 2019. "What you get is what you see: Cooperation in repeated games with observable payoffs," Journal of Economic Theory, Elsevier, vol. 181(C), pages 197-237.
    • Handle: RePEc:eee:jetheo:v:181:y:2019:i:c:p:197-237
    DOI: 10.1016/j.jet.2019.02.007
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    More about this item

    Keywords

    Discounted repeated games; Observable payoffs; Efficient payoffs; 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
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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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