Cooperation under incomplete information on the discount factors
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Publication:2349412
Abstract: In repeated games, cooperation is possible in equilibrium only if players are sufficiently patient, and long-term gains from cooperation outweigh short-term gains from deviation. What happens if the players have incomplete information regarding each other's discount factors? In this paper we look at repeated games in which each player has incomplete information regarding the other player's discount factor, and ask when full cooperation can arise in equilibrium. We provide necessary and sufficient conditions that allow full cooperation in equilibrium that is composed of grim trigger strategies, and characterize the states of the world in which full cooperation occurs. We then ask whether these "cooperation events" are close to those in the complete information case, when the information on the other player's discount factor is "almost" complete.
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Cited in
(13)- Information, variance and cooperation: minimal models
- Information can wreck cooperation: a counterpoint to Kandori (1992)
- Cooperation and signaling with uncertain social preferences
- Cooperation in games with forgetfulness
- Privacy, patience, and protection
- Cooperation in a dynamical adjustment of duopoly game with incomplete information
- Cost asymmetry and incomplete information in a volunteer's dilemma experiment
- Myopic perception in repeated games
- Asymmetrical expectations of future interaction and cooperation in the iterated prisoner's dilemma game
- Robustness to incomplete information in repeated games
- Efficient cooperation by exchanging favors
- Reputation, incomplete information, and differences in patience in repeated games with multiple equilibria
- Cooperation under incomplete information on the discount factors
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