I study two-player undiscounted repeated games with imperfect private monitoring. When strategies are restricted to those implementable by nite automata, fewer equilibrium outcomes are possible. When only two-state automata are allowed, a simple strategy, "Win-Stay, Lose-Shift," leads to...

In this paper we offer a new approach to modeling strategies of bounded complexity, the so-called factor-based strategies. In our model, the strategy of a player in the multi-stage game does not directly map the set of histories to the set of her actions. Instead, the player's perception of is...

Correlation of players' actions may evolve in the common course of the play of a repeated game with perfect monitoring (“online correlation”). In this paper we study the concealment of such correlation from a boundedly rational player. We show that “strong” players, i.e., players whose...

We experimentally test the ability of subjects to identify repeated-game strategies from prisoner's dilemma choice data. In the experiments, subjects use a finite state grammar to build models to fit game histories. The histories are designed to distinguish between strategies with empirical and...

This study investigates whether cooperation in an indefinitely repeated prisoner's dilemma is sensitive to the complexity of cooperative strategies. An experimental design which allows manipulations of the complexity of these strategies by making either the cooperate action or the defect action...

We study two-person repeated games in which a player with a restricted set of strategies plays against an unrestricted player. An exogenously given bound on the complexity of strategies, which is measured by the size of the smallest automata that implement them, gives rise to a restriction on...

This paper is a note on how Information Theory and Codification Theory are helpful in the computational design both of communication protocols and strategy sets in the framework of finitely repeated games played by boundedly rational agents. More precisely, we show the usefulness of both...

We study an infinite-horizon economy with two basic frictions that are typical in monetary models. First, agents’ trading paths cross at most once due to pairwise trade and other meeting obstacles. Second, actions must be compatible with individual incentives due to commitment and enforcement...

The role of whistle-blowing as a mechanism for deterring corruption has been conspicuously neglected in the economic literature. This is quite surprising given the increase in legislation aimed at preventing corruption that includes whistle-blowing clauses and the extensive literature on...

Experimental and observational studies have highlighted the importance of agents being conditionally cooperative when facing a social dilemma. We formalize this mechanism in a theoretical model that portrays a small community having joint access to a common pool resource. The diffusion of norms...