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Repeated Games with Asymptotically Finite Horizon and Imperfect Public Monitoring

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Listed:
  • Yves Guéron

    (Seoul National University)

Abstract

We consider a two-player infinitely repeated game with asymptotically finite horizons: discount factors converge to zero over time. The stage-game has a continuum of actions and a unique and interior Nash equilibrium. It is known that when players perfectly observe each other’s actions, cooperation can be achieved and equilibrium payoffs can be strictly higher than the stage-game equilibrium payoff. We show that introducing an arbitrarily small amount of smooth noise in the monitoring makes cooperation impossible and players play the static Nash equilibrium of the stage-game forever.

Suggested Citation

  • Yves Guéron, 2019. "Repeated Games with Asymptotically Finite Horizon and Imperfect Public Monitoring," Korean Economic Review, Korean Economic Association, vol. 35, pages 109-123.
    • Handle: RePEc:kea:keappr:ker-20190101-35-1-04
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    References listed on IDEAS

    as
    1. Bernheim B. Douglas & Dasgupta Aniruddha, 1995. "Repeated Games with Asymptotically Finite Horizons," Journal of Economic Theory, Elsevier, vol. 67(1), pages 129-152, October.
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    More about this item

    Keywords

    Dynamic Games; Asymptotically Finite Horizon; Folk-theorem; Imperfect Monitoring;
    All these keywords.

    JEL classification:

    • 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

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