THE ROLE OF INFORMATION IN REPEATED GAMES WITH FREQUENT ACTIONS

摘要

We show that in repeated interactions the avenues for effective provision of incentives depend crucially on the type of information players observe. We establish this conclusion for general repeated two-player games in which information arrives via acontinuous-time stationary process that has a continuous multidimensional Brownian component and a Poisson component, and in which the players act frequently. The Pois-son jumps can be used to effectively provide incentives both with transfers and valueburning, while continuous Brownian information can be used to provide incentives only with transfers.