Informational Requirements for Cooperation: Theory and Applications

More on Alexander Wolitzky

Signup Sheet

Hosted by Wharton BEPP

Abstract: We study how discounting and monitoring jointly determine whether cooperation is possible in repeated games with imperfect (public or private) monitoring. Our main result provides a simple bound on the strength of players' incentives as a function of discounting, monitoring precision, and payoff variance. We show that this bound is tight in the low-discounting/low-monitoring double limit, by establishing a folk theorem where the discount factor and the monitoring structure vary simultaneously.  Applications include games with frequent actions, games with large populations, and rate-of-convergence results.

Joint with Takuo Sugaya