Communication and cooperation in repeated games

Yu Awaya, Vijay Krishna

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

We study the role of communication in repeated games with private monitoring. We first show that without communication, the set of Nash equilibrium payoffs in such games is a subset of the set of ε-coarse correlated equilibrium payoffs (ε-CCE) of the underlying one-shot game. The value of ε depends on the discount factor and the quality of monitoring. We then identify conditions under which there are equilibria with “cheap talk” that result in nearly efficient payoffs outside the set ε-CCE. Thus, in our model, communication is necessary for cooperation.

Original languageEnglish (US)
Pages (from-to)513-553
Number of pages41
JournalTheoretical Economics
Volume14
Issue number2
DOIs
StatePublished - May 2019

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Repeated games
Communication
Discount factor
Correlated equilibrium
Monitoring
Nash equilibrium
Private monitoring
Cheap talk

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

Cite this

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Communication and cooperation in repeated games. / Awaya, Yu; Krishna, Vijay.

In: Theoretical Economics, Vol. 14, No. 2, 05.2019, p. 513-553.

Research output: Contribution to journalArticle

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