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Efficiency in repeated games with local interaction and uncertain local monitoring

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  • Nava, Francesco
  • Piccione, Michele

Abstract

The paper discusses community enforcement in infinitely repeated, two-action games with local interaction and uncertain monitoring. Each player interacts with and observes only a fixed set of opponents, of whom he is privately informed. the main result shows that when beliefs about the monitoring structure have full support, efficiency can be sustained with sequential equilibria that are independent of the players' beliefs. Stronger results are obtained when only acyclic monitoring structures are allowed or players have unit discount rates. These equilibria satisfy numerous robustness properties.

Suggested Citation

  • Nava, Francesco & Piccione, Michele, 2012. "Efficiency in repeated games with local interaction and uncertain local monitoring," LSE Research Online Documents on Economics 54250, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:54250
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    File URL: http://eprints.lse.ac.uk/54250/
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    References listed on IDEAS

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    6. Vega-Redondo, Fernando, 2006. "Building up social capital in a changing world," Journal of Economic Dynamics and Control, Elsevier, vol. 30(11), pages 2305-2338, November.
    7. David Miller & Nageeb Ali, 2008. "Cooperation and Collective Enforcement in Networked Societies," 2008 Meeting Papers 970, Society for Economic Dynamics.
    8. McBride, Michael, 2006. "Imperfect monitoring in communication networks," Journal of Economic Theory, Elsevier, vol. 126(1), pages 97-119, January.
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    10. Alexander Wolitzky, 2013. "Cooperation with Network Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(1), pages 395-427.
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    12. Markus Kinateder, 2006. "Repeated Games Played in a Network," UFAE and IAE Working Papers 674.06, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    13. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 63-80.
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    Cited by:

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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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