Econometrica Vol. 62 No. 5 1994
The Folk Theorem with Imperfect Public Information
open access
Abstract
The authors study repeated games in which players observe a public outcome that imperfectly signals the actions played. They provide conditions guaranteeing that any feasible, individually rational payoff vector of the stage game can arise as a perfect equilibrium of the repeated game with sufficiently little discounting. The central condition requires that there exist action profiles with the property that, for any two players, no two deviations--one by either player--give rise to the same probability distribution over public outcomes. The results apply to principal-agent, partnership, oligopoly, and mechanism-design models, and to one-shot games with transferable utilities.
- DOI
- 10.2307/2951505
- Volume
- 62
- Issue
- 5
- Pages
- 997
- Sources
- bibtex:phds-export.bib openalex crossref