We prove the folk theorem for the Prisoner's dilemma using strategies that are robust to private monitoring. From this follows a limit folk theorem : when players are patient and monitoring is sufficiently accurate, (but private and possibly independent) any feasible individually rational payoff...

Wilson (1987) criticizes the existing literature of game theory as relying too much on common-knowledge assumptions. In reaction to Wilson's critique, the recent literature of mechanism design has started to employ stronger solution concepts such as dominant strategy incentive compatibility, and...