TRUTHFUL EQUILIBRIA IN DYNAMIC BAYESIAN GAMES

This paper characterizes an equilibrium payoff subset for dynamic Bayesian games as discounting vanishes. Monitoring is imperfect, transitions may depend on actions, types may be correlated, and values may be interdependent. The focus is on equilibria in which players report truthfully. The characte...

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Bibliographic Details
Published in:	Econometrica Vol. 83; no. 5; pp. 1795 - 1848
Main Authors:	Hörner, Johannes, Takahashi, Satoru, Vieille, Nicolas
Format:	Journal Article
Language:	English
Published:	Oxford, UK Econometric Society 01-09-2015 Blackwell Publishing Ltd
Subjects:	Approximation Bayesian analysis Bayesian games Bayesian method Coordinate systems Correlation analysis Credibility Dynamic games Economic theory Equilibrium folk theorem Game theory Incentive pay Logical givens Markov chains Nash equilibrium Obedience Repeated games Studies Theorems
Online Access:	Get full text
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Summary:	This paper characterizes an equilibrium payoff subset for dynamic Bayesian games as discounting vanishes. Monitoring is imperfect, transitions may depend on actions, types may be correlated, and values may be interdependent. The focus is on equilibria in which players report truthfully. The characterization generalizes that for repeated games, reducing the analysis to static Bayesian games with transfers. With independent private values, the restriction to truthful equilibria is without loss, except for the punishment level: if players withhold their information during punishment-like phases, a folk theorem obtains.
Bibliography:	ObjectType-Article-1 SourceType-Scholarly Journals-1 ObjectType-Feature-2 content type line 23
ISSN:	0012-9682 1468-0262
DOI:	10.3982/ECTA12182