Communication and Cooperation in Repeated Games

We study the role of communication in repeated games with private monitoring. We first show that without communication, the set of Nash equilibrium payoffs in such games is a subset of the set of epsilon-coarse correlated equilibrium payoffs (epsilon-CCE) of the underlying one-shot game. The value of epsilon depends on the discount factor and the quality of monitoring. We then identify conditions under which there are equilibria with "cheap talk" that result in nearly efficient payoffs outside the set epsilon-CCE. Thus, in our model, communication is necessary for cooperation.

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Work Title Communication and Cooperation in Repeated Games
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Open Access
Creators
  1. Yu Awaya
  2. Vijay Krishna
Keyword
  1. Repeated games, private monitoring, communication
License Public Domain Mark 1.0
Work Type Article
Publication Date 2019
Deposited April 11, 2021

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    • http://creativecommons.org/publicdomain/mark/1.0/
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