Efficiency in repeated two-action games with local monitoring

Nava, Francesco and Piccione, Michele (2011) Efficiency in repeated two-action games with local monitoring. Theoretical Economics (TE/2012/560). Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.

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Abstract

The paper discusses community enforcement in infinitely repeated two-action games with local monitoring. Each player interacts with and observes only a fixed set of partners, of whom he is privately informed. The main result shows that for generic beliefs efficiency can be sustained in a sequential equilibrium in which strategies are independent of the players’ beliefs about the monitoring structure. Stronger results are obtained when players are arbitrarily patient and payoffs are evaluated according to Banach-Mazur limits, and when players are impatient and only acyclic monitoring structures are allowed.

Item Type:	Monograph (Report)
Official URL:	http://sticerd.lse.ac.uk/
Additional Information:	© 2011 The Authors
Divisions:	STICERD
Subjects:	H Social Sciences > HB Economic Theory
Date Deposited:	21 Jul 2014 15:29
Last Modified:	13 Sep 2024 16:45
URI:	http://eprints.lse.ac.uk/id/eprint/58062

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