The Impact of Monitoring in Infinitely Repeated Games PDF Download
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Author: Masaki Aoyagi
Publisher:
ISBN:
Category :
Languages : en
Pages : 39
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Book Description
This paper uses a laboratory experiment to study the effect of a monitoring structure on the play of the infinitely repeated prisoner's dilemma. Keeping the stage game fixed, we examine the behavior of subjects when information about past actions is perfect (perfect monitoring), noisy but public (public monitoring), and noisy and private (private monitoring). We find that the subjects sustain cooperation in every treatment, but that their strategies differ substantially in the three treatments. Specifically, we observe that the strategies are more complex under public and private monitoring than under perfect monitoring. We also find that the strategies under private monitoring are more lenient than under perfect monitoring, and less forgiving than under public monitoring.
Author: Masaki Aoyagi
Publisher:
ISBN:
Category :
Languages : en
Pages : 39
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Book Description
This paper uses a laboratory experiment to study the effect of a monitoring structure on the play of the infinitely repeated prisoner's dilemma. Keeping the stage game fixed, we examine the behavior of subjects when information about past actions is perfect (perfect monitoring), noisy but public (public monitoring), and noisy and private (private monitoring). We find that the subjects sustain cooperation in every treatment, but that their strategies differ substantially in the three treatments. Specifically, we observe that the strategies are more complex under public and private monitoring than under perfect monitoring. We also find that the strategies under private monitoring are more lenient than under perfect monitoring, and less forgiving than under public monitoring.
Author: Ichiro Obara
Publisher:
ISBN:
Category :
Languages : en
Pages : 121
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Author: Xue Xu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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We experimentally examine whether communicating private signals after each stage game affects cooperation in an infinitely repeated two-player prisoner's dilemma where players can only observe imperfect and private signals about the partner's actions. Based on evidence from two specifications of stage payoffs, we find that when the return to cooperation is low, communication increases the probability of cooperation; however, this effect is not significant when the return to cooperation is high. We also show that subjects use various strategies to reveal their private observations, with the majority of their messages being truthful. By comparing games with communication to games with imperfect public signals, we further demonstrate that subjects respond to the message received from the partner in the same way that they respond to the public signal about their own past action. This finding suggests that the mechanism by which communication works is similar to that of public monitoring.
Author: George J. Mailath
Publisher:
ISBN:
Category : Game theory
Languages : en
Pages : 40
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Author: Pavlo Prokopovych
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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This paper studies extensive-form correlation in discounted infinitely repeated games with public monitoring. We propose two extensions of Fudenberg et al.'s (Econometrica 62:997--1040, 1994) notion of a perfect public equilibrium: the notion of a perfect public correlated equilibrium for games in which a correlation device sends private correlated messages to the players at the beginning of each period and the notion of a perfect public augmented equilibrium for games in which the device also publicly informs the players of the recommended action profile at the end of each period. The set of perfect public correlated equilibrium payoffs is compared to the set of subgame perfect publicly correlated equilibrium payoffs in the perfect monitoring case. It is shown that augmented correlation produces efficiency gains in the repeated partnership game by Radner et al. (Rev Econ Stud 53:59-69, 1986).
Author: Flavio M. Menezes
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 314
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Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 250
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Author: Pedro Dal Bo
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ISBN:
Category :
Languages : en
Pages : 83
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There have been major advances in the theoretical study of the determinants of cooperation with many applications in economics and the social sciences. A growing experimental literature has studied the determinants of cooperation, tested different predictions of the theory, and suggested an empirical solution to the problem of multiple equilibria in infinitely repeated games. To provide a robust description of the literature's findings, we gather and analyze a meta-data set of experiments on infinitely repeated prisoners' dilemma games. The experimental data shows that cooperation is affected by infinite repetition and that cooperation is more likely to arise when it can be supported in equilibrium. However, the fact that cooperation can be supported in equilibrium does not imply that most subjects will cooperate. High cooperation rates will only emerge when the parameters of the repeated game are such that cooperation is very robust to strategic uncertainty.We also review the results regarding the effect of imperfect monitoring, changing partners and personal characteristics on cooperation and the strategies used to support it.
Author: Richard P. McLean
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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For repeated games with noisy private monitoring and communication, we examine robustness of perfect public equilibrium/subgame perfect equilibrium when private monitoring is close to some public monitoring. Private monitoring is close. to public monitoring if the private signals can generate approximately the same public signal once they are aggregated. Two key notions on private monitoring are introduced: Informational Smallness and Distributional Variability. A player is informationally small if she believes that her signal is likely to have a small impact when private signals are aggregated to generate ate a public signal. Distributional variability measures the variation in a player's conditional beliefs over the generated public signal as her private signal varies. When informational size is small relative to distributional variability (and private signals are sufficiently close to public monitoring), a uniformly strict equilibrium with public monitoring remains an equilibrium with private monitoring and communication. To demonstrate that uniform strictness is not overly restrictive, we prove a uniform folk theorem with public monitoring which, combined with our robustness result, yields a new folk theorem for repeated games with private monitoring and communication.
Author: George J. Mailath
Publisher: Oxford University Press
ISBN: 0195300793
Category : Business & Economics
Languages : en
Pages : 664
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Book Description
Personalized and continuing relationships play a central role in any society. Economists have built upon the theories of repeated games and reputations to make important advances in understanding such relationships. Repeated Games and Reputations begins with a careful development of the fundamental concepts in these theories, including the notions of a repeated game, strategy, and equilibrium. Mailath and Samuelson then present the classic folk theorem and reputation results for games of perfect and imperfect public monitoring, with the benefit of the modern analytical tools of decomposability and self-generation. They also present more recent developments, including results beyond folk theorems and recent work in games of private monitoring and alternative approaches to reputations. Repeated Games and Reputations synthesizes and unifies the vast body of work in this area, bringing the reader to the research frontier. Detailed arguments and proofs are given throughout, interwoven with examples, discussions of how the theory is to be used in the study of relationships, and economic applications. The book will be useful to those doing basic research in the theory of repeated games and reputations as well as those using these tools in more applied research.
