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Repeated Games Where the Payoffs and Monitoring Structure Are Unknown
Author(s) -
Fudenberg Drew,
Yamamoto Yuichi
Publication year - 2010
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.3982/ecta8565
Subject(s) - stochastic game , identifiability , mathematical economics , imperfect , extension (predicate logic) , folk theorem , characterization (materials science) , repeated game , mathematics , information structure , comparative statics , economics , computer science , game theory , microeconomics , equilibrium selection , statistics , philosophy , linguistics , materials science , programming language , nanotechnology
This paper studies repeated games with imperfect public monitoring where the players are uncertain both about the payoff functions and about the relationship between the distribution of signals and the actions played. We introduce the concept of perfect public ex post equilibrium (PPXE), and show that it can be characterized with an extension of the techniques used to study perfect public equilibria. We develop identifiability conditions that are sufficient for a folk theorem; these conditions imply that there are PPXE in which the payoffs are approximately the same as if the monitoring structure and payoff functions were known. Finally, we define perfect type‐contingently public ex post equilibria (PTXE), which allows players to condition their actions on their initial private information, and we provide its linear programming characterization.