Communication, correlation and cheap-talk in games with public information

Heller, Yuval; Solan, Eilon; Tomala, Tristan

doi:10.1016/j.geb.2011.05.002

“…The main idea is as in the literature on implementing correlated equilibria without a mediator (see Forges (2009) for a survey). More specifically, Proposition 2 is similar to Theorem 9 of Heller et al (2012), which shows that communication equilibria in repeated games with perfect monitoring can always be implemented by ex ante correlation and cheap talk. Since we also assume players observe actions perfectly, the main difference between the results is that theirs is for Nash rather than sequential equilibrium, so they are concerned only with detecting deviations rather than providing incentives to punish deviations once detected.…”

Section: Tightness Of the Boundmentioning

confidence: 56%

Bounding equilibrium payoffs in repeated games with private monitoring

Sugaya

¹

,

Wolitzky²

2017

Theoretical Economics

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We provide a simple sufficient condition for the existence of a recursive upper bound on (the Pareto frontier of) the sequential equilibrium payoff set at a fixed discount factor in two-player repeated games with imperfect private monitoring. The bounding set is the sequential equilibrium payoff set with perfect monitoring and a mediator. We show that this bounding set admits a simple recursive characterization, which nonetheless necessarily involves the use of private strategies. Under our condition, this set describes precisely those payoff vectors that arise in equilibrium for some private monitoring structure if either nonstationary monitoring or communication is allowed.

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“…12 The equilibrium strategies suggested in the previous paragraph raise two problems. The first one, which is not typical of our construction (see, e.g., Bárány 1992 andHeller et al 2012), is that punishments may appear as incredible threats. We come back to this below.…”

Section: Implementing Communication Equilibria By Cheap Talkmentioning

confidence: 96%

“…The brief sketch above also suggests that our construction makes use of punishments. This should not be surprising in view of the literature on the implementation of a mediator by cheap talk (see Bárány 1992 for an early example, Heller et al 2012 for a recent one, , 2006and Gerardi 2004 for discussions and solutions to the problem, and Forges 2009 for a survey). Are these punishments credible?…”

Section: Introductionmentioning

confidence: 99%

Implementation of communication equilibria by correlated cheap talk: The two-player case

Vida

¹

,

Forges

²

2013