The folk theorem for repeated games with observation costs

• 成果类型: Article
• 署名作者: Miyagawa, Elichi; Miyahara, Yasuyuki; Sekiguchi, Tadashi
• 署名单位: Kyoto University; Kobe University; Kobe University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2007.04.001
• 发表日期: 2008
• 页码: 192-221
• 关键词: cooperation; collusion; private information; information acquisition

摘要

The folk theorem literature has been relaxing the assumption on how much players know about each other's past action. Here we consider a general model where players can buy precise information. Every period, each player decides whether to pay a cost to accurately observe the actions chosen by other players in the previous period. When a player does not pay the cost, he obtains only imperfect private signals. Observational decisions are unobservable to others. Known strategies such as trigger strategies do not work since they fail to motivate players to pay for information. This paper shows that the folk theorem holds for any level of observation costs. Unlike existing folk theorems with private monitoring, ours imposes virtually no restriction on the nature of costless imperfect signals. The theorem does not use explicit or costless communication, thereby having implications on antitrust laws that rely on evidence of explicit communication. The main message is that accurate observation alone, however costly, enables efficient cooperation in general repeated games. (C) 2007 Elsevier Inc. All rights reserved.