Communication in repeated network games with imperfect monitoring

• Published in: Games and economic behavior 2014-09, Vol.87, p.136-160
• Main Author: Laclau, M.
• Format: Article
• Language: English
• Subjects: Communication; Communications technology; Economic analysis; Economic behaviour; Economics and Finance; Folk theorem; Game theory; Games; Humanities and Social Sciences; Imperfect private monitoring; Internet; Management science; Network topologies; Networks; Repeated games; Studies; Theorems
• ISSN: 0899-8256; 1090-2473
• DOI: 10.1016/j.geb.2014.04.009

I consider repeated games with private monitoring played on a network. Each player has a set of neighbors with whom he interacts: a player's payoff depends on his own and his neighbors' actions only. Monitoring is private and imperfect: each player observes his stage payoff but not the actions of his neighbors. Players can communicate costlessly at each stage: communication can be public, private or a mixture of both. Payoffs are assumed to be sensitive to unilateral deviations. First, for any network, a folk theorem holds if some Joint Pairwise Identifiability condition regarding payoff functions is satisfied. Second, a necessary and sufficient condition on the network topology for a folk theorem to hold for all payoff functions is that no two players have the same set of neighbors not counting each other. •I consider repeated games on a network with private monitoring and local interaction.•A player's payoff depends on his own and his neighbors' actions only.•Monitoring is private: each player observes his stage payoff only.•Players can communicate costlessly at each stage, publicly or privately.•A folk theorem holds if and only if no two players have the same neighbors.