We challenge the global optimality of one-shot punishments in infinitely repeated games with discounting. Specifically, we show that the stick-and-carrot punishment à la Abreu (1986) may not be globally optimal. We prove our result by investigating tacit collusion in the infinite repetition of...

We prove a folk theorem for multiplayer games in continuous time when players observe a public signal distorted by Brownian noise. The proof is based on a rigorous foundation for such continuous-time multiplayer games. We study in detail the relation between behaviour and mixed strategies, and...

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...

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...

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...