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A folk theorem with codes of conduct and communication

Published version
Peer-reviewed

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Type

Article

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Authors

Block, Juan I 
Levine, David K 

Abstract

We study self-referential games in which players have the ability to commit to a code of conduct—a complete description of how they play and their opponents should play. Each player receives a private signal about each others’ code of conduct and their codes of conduct specify how to react to these signals. When only some players receive informative signals, players are allowed to communicate using public messages. Our characterization of the effect of communication on the equilibrium payoffs yields a folk theorem and players share their private information truthfully in equilibrium. We also provide an application of codes of conduct: games that are played through computer programs.

Description

Keywords

folk theorem, self-referential game, commitment, communication

Journal Title

Economic Theory Bulletin

Conference Name

Journal ISSN

2196-1085
2196-1093

Volume Title

Publisher

Springer Science and Business Media LLC
Sponsorship
Juan Block acknowledges support from the Cambridge-INET Institute, and David Levine thanks the National Science Foundation (Grant SES-0851315) and the European University Institute for financial support.