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CEREMADE

By Jérôme Renault, Sergio Scarlatti and Marco Scarsini

Abstract

We study a particular case of repeated games with public signals. In the stage game an odd number of players have to choose simultaneously one of two rooms. The players who choose the less crowded room receive a reward of one euro (whence the name “minority game”). Between the stages, only the current majority room is publicly announced. We show that in the infinitely repeated game any feasible payoff can be achieved as a uniform equilibrium payoff, and as an almost sure equilibrium payoff. In particular we construct an inefficient equilibrium where, with probability one, all players choose the same room at almost all stages. This equilibrium is sustained by punishment phases which use, in a unusual way, the pure actions that were played before the start of the punishment

Topics: Repeated games, imperfect monitoring, public signals
Year: 2003
OAI identifier: oai:CiteSeerX.psu:10.1.1.197.9962
Provided by: CiteSeerX
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