Efficiency in Games With Markovian Private Information
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escobar-toikka-ecta-final.pdf
Description
Final version
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637.09 KB
Format
Adobe PDF
Checksum (MD5)
3da182cb95a160ec76a668774346dfb8
Author(s)
Escobar, Juan F.
Toikka, Juuso
Date Issued
September 2013
Journal
Econometrica
Publisher
The Econometric Society
Citation
Escobar, Juan F., and Juuso Toikka. “Efficiency in Games With Markovian Private Information.” Econometrica 81.5 (2013): 1887–1934.
Version
Author's final manuscript
Abstract
We study repeated Bayesian games with communication and observable actions in which the players' privately known payoffs evolve according to an irreducible Markov chain whose transitions are independent across players. Our main result implies that, generically, any Pareto-efficient payoff vector above a stationary minmax value can be approximated arbitrarily closely in a perfect Bayesian equilibrium as the discount factor goes to 1. As an intermediate step, we construct an approximately efficient dynamic mechanism for long finite horizons without assuming transferable utility.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
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DOI of Published Version
https://doi.org/10.3982/ecta9557
