Delayed-response strategies in repeated games with observation lags

Drew Fudenberg, Yuhta Ishii, Scott Duke Kominers

Research output: Contribution to journalArticle

6 Scopus citations

Abstract

We extend the folk theorem of repeated games to two settings in which players' information about others' play arrives with stochastic lags. In our first model, signals are almost-perfect if and when they do arrive, that is, each player either observes an almost-perfect signal of period. t play with some lag or else never sees a signal of period. t play. The second model has the same lag structure, but the information structure corresponds to a lagged form of imperfect public monitoring, and players are allowed to communicate via cheap-talk messages at the end of each period. In each case, we construct equilibria in "delayed-response strategies," which ensure that players wait long enough to respond to signals that with high probability all relevant signals are received before players respond. To do so, we extend past work on private monitoring to obtain folk theorems despite the small residual amount of private information.

Original languageEnglish (US)
Pages (from-to)487-514
Number of pages28
JournalJournal of Economic Theory
Volume150
Issue number1
DOIs
Publication statusPublished - Feb 25 2014

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All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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