Folk theorems with bounded recall under (almost) perfect monitoring

George J. Mailath*, Wojciech Olszewski

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

20 Scopus citations

Abstract

We prove the perfect-monitoring folk theorem continues to hold when attention is restricted to strategies with bounded recall and the equilibrium is essentially required to be strict. As a consequence, the perfect monitoring folk theorem is shown to be behaviorally robust under almost-perfect almost-public monitoring. That is, the same specification of behavior continues to be an equilibrium when the monitoring is perturbed from perfect to highly-correlated private.

Original languageEnglish (US)
Pages (from-to)174-192
Number of pages19
JournalGames and Economic Behavior
Volume71
Issue number1
DOIs
StatePublished - Jan 2011

Keywords

  • Bounded recall strategies
  • Folk theorem
  • Imperfect monitoring
  • Repeated games

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

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