COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 1739 Belief-free Equilibria in Games with Incomplete Information: Johannes Hörner, Stefano Lovo and Tristan Tomala November 2009 We characterize belief-free equilibria in infinitely repeated games with incomplete
information with N > 2 players and arbitrary information structures. This
characterization involves a new type of individual rational constraint linking the lowest
equilibrium payoffs across players. The characterization is tight: we define a set of
payoffs that contains all the belief-free equilibrium payoffs; conversely, any point in
the interior of this set is a belief-free equilibrium payoff vector when players are
sufficiently patient. Further, we provide necessary conditions and sufficient conditions
on the information structure for this set to be non-empty, both for the case of known-own
payoffs, and for arbitrary payoffs. |
