Online concealed correlation and bounded rationality

• 成果类型: Article
• 署名作者: Bavly, Gilad; Neyman, Abraham
• 署名单位: Tel Aviv University; Hebrew University of Jerusalem; Hebrew University of Jerusalem
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2014.08.004
• 发表日期: 2014
• 页码: 71-89
• 关键词: Repeated games; Bounded recall; Finite automata; Concealed correlation; folk theorem; Equilibrium payoffs

摘要

Correlation of players' actions may evolve in the common course of the play of a repeated game with perfect monitoring (online correlation). In this paper we study the concealment of such correlation from a boundedly rational player. We show that strong players, i.e., players whose strategic complexity is less stringently bounded, can orchestrate the online correlation of the actions of weak players, where this correlation is concealed from an opponent of intermediate strength. The feasibility of such online concealed correlation is reflected in the individually rational payoff of the opponent and in the equilibrium payoffs of the repeated game. This result enables the derivation of a folk theorem that characterizes the set of equilibrium payoffs in a class of repeated games with boundedly rational players and a mechanism designer who sends public signals. The result is illustrated in two models, bounded recall strategies and finite automata. (C) 2014 Elsevier Inc. All rights reserved.