Cooperation dynamics in repeated games of adverse selection

• 成果类型: Article
• 署名作者: Escobar, Juan F.; Llanes, Gaston
• 署名单位: Universidad de Chile; Pontificia Universidad Catolica de Chile
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2018.04.004
• 发表日期: 2018
• 页码: 408-443
• 关键词: Repeated games; private information; signaling; COORDINATION; collusion; COMMUNICATION

摘要

We study cooperation dynamics in repeated games with Markovian private information. After any history, signaling reveals information that helps players coordinate their future actions, but also makes the problem of coordinating current actions harder. In equilibrium, players may play aggressive or uncooperative actions that signal private information and partners tolerate a certain number of such actions. We discuss several applications of our results: We explain the cycles of cooperation and conflict observed in trench warfare during World War I, show that price leadership and unilateral price cuts can be part of an optimal signaling equilibrium in a repeated Bertrand game with incomplete information, and show that communication between cartel members may be socially efficient in a repeated Cournot game. Finally, we show that the welfare losses disappear as the persistence of the process of types increases and the interest rate goes to zero. (C) 2018 Elsevier Inc. All rights reserved.