We study two-player discounted repeated games in which one player cannot monitor the other unless he pays a fixed amount. It is well known that in such a model the folk theorem holds when the monitoring cost is on the order of magnitude of the stage payoff. We analyze high frequency games in...

We study two-player discounted repeated games in which one player cannot monitor the other unless he pays a fixed amount. It is well known that in such a model the folk theorem holds when the monitoring cost is on the order of magnitude of the stage payoff. We analyze high frequency games in...

We introduce the concept of -consistent equilibrium where each player plays a -best response after every history reached with positive probability. In particular, an -consistent equilibrium induces an -equilibrium in any subgame reached along the play path. The existence of -consistent...

In Ellsberg paradox, decision makers that are partially informed about the actual probability distribution violate the expected utility paradigm. This paper develops a theory of decision making with a partially specified probability. The paper takes an axiomatic approach using Anscombe-Aumann's...