Abstract:

The paper considers repeated games where each player can be observed by only a subset of the other players, and where players can make public announcements about the behavior of the players they observed. We address the following question: What is the minimal level of observability that is required to obtain efficient outcomes? The main result is that the limit set of sequential equilibrium payoffs, when the discount factor tends to one, contains the set of individual rational payoffs whenever each player is observed by at least two other players. Journal of Economic Literature Classification Number: C73.

Language: English

Document Type: Research article

Affiliations: 1: J. L. Kellogg Graduate School of Management, Northwestern University, 2001 Sheridan Road, Evanston, Illinois, 60208 2: Department of Economics, Tel Aviv University, Tel Aviv, Israel 3: Department of Economics, Tel Aviv University, Israel