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- Title
Individual Learning and Cooperation in Noisy Repeated Games.
- Authors
Yamamoto, Yuichi
- Abstract
We investigate whether two players in a long-run relationship can maintain cooperation when the details of the underlying game are unknown. Specifically, we consider a new class of repeated games with private monitoring, where an unobservable state of the world influences the payoff functions and/or the monitoring structure. Each player privately learns the state over time but cannot observe what the opponent learned. We show that there are robust equilibria in which players eventually obtain payoffs as if the true state were common knowledge and players played a “belief-free” equilibrium. We also provide explicit equilibrium constructions in various economic examples.
- Subjects
INDIVIDUAL learning accounts; REPEATED games (Game theory); ECONOMIC equilibrium; OLIGOPOLIES; PRIVATE companies
- Publication
Review of Economic Studies, 2014, Vol 81, Issue 1, p473
- ISSN
0034-6527
- Publication type
Article
- DOI
10.1093/restud/rdt029