We study impersonal exchange, and ask how agents can behave honestly in anonymous transactions without contracts. We analyze repeated anonymous random matching games, where agents observe only their own transactions. Little is known about cooperation in this setting beyond the prisoner's...

We choose between alternatives without being fully informed about the rewards from different courses of action. In making our decisions, we use our own past experience and the experience of others. So the ways in which we interact - our social network - can influence our choices. These choices...

This paper studies generic properties of Markov perfect equilibria in dynamic stochastic games. We show that almost all dynamic stochastic games have a finite number of locally isolated Markov perfect equilibria. These equilibria are essential and strongly stable. Moreover, they all admit...

This chapter provides a survey of the recent work on learning in the context of macroeconomics. Learning has several roles. First, it provides a boundedly rational model of how rational expectations can be achieved. Secondly, learning acts as a selection device in models with multiple REE...

We analyze the extent to which efficient trade is possible in an ongoing relationship between impatient agents with hidden valuations (i.i.d. over time), restricting attention to equilibria that satisfy ex post incentive constraints in each period. With ex ante budget balance, efficient trade...

In the reputation literature, players have \emph{commitment types} which represent the possibility that they do not have standard payoffs but instead are constrained to follow a particular plan. In this paper, we show that arbitrary commitment types can emerge from incomplete information about...

The paper discusses community enforcement in infinitely repeated, two-action games with local interaction and uncertain monitoring. Each player interacts with and observes only a fixed set of opponents, of whom he is privately informed. The main result shows that when beliefs about the...

The payoff matrix of a finite stage game is realized randomly, and then the stage game is repeated infinitely. The distribution over states of the world (a state corresponds to a payoff matrix) is commonly known, but players do not observe nature’s choice. Over time, they can learn the state...

A key obstacle to coordination and cooperation in many networked environments is that behavior in each bilateral relationship is not observable to individuals outside that relationship: that is, information is local. This paper investigates when players can use communication to replicate any...