This paper investigates the Harsanyi (1973)-purifiability of mixed strategies in the repeated prisoners' dilemma with perfect monitoring. We perturb the game so that in each period, a player receives a private payoff shock which is independently and identically distributed across players and...

We study stochastic games with an infinite horizon and sequential moves played by an arbitrary number of players. We assume that social memory is finite--every player, except possibly one, is finitely lived and cannot observe events that are sufficiently far back in the past. This class of games...

Abstract Individuals making investments typically do not have incentives to invest efficiently when they cannot contract prior to their decisions. When they bargain over the surplus generated by their investments, they will usually not obtain the full fruits of the investment. Intuitively, this...

Abstract We present three examples of finitely repeated games with public monitoring that have sequential equilibria in private strategies, i.e., strategies that depend on own past actions as well as public signals. Such private sequential equilibria can have features quite unlike those of the...

The social context can have a large impact on economic decisions. The theoretical challenge is to formulate a model that encompasses both social and economic decisions in a meaningful manner. We discuss the incorporation of social context into neoclassical economic models using social...