Econometrica: Mar 2006, Volume 74, Issue 2
Efficiency in Repeated Games Revisited: The Role of Private Strategies
Michihiro Kandori, Ichiro ObaraMost theoretical or applied research on repeated games with imperfect monitoring has focused on : strategies that depend solely on the history of publicly observable signals. This paper sheds light on the role of : strategies that depend not only on public signals, but also on players' own actions in the past. Our main finding is that players can sometimes make better use of information by using private strategies and that . Our equilibrium private strategy for repeated prisoners' dilemma games consists of two states and has the property that each player's optimal strategy is independent of the other player's state.
Log In To View Full Content