COMMUNICATION IN REPEATED GAMES WITH PRIVATE MONITORING

The paper considers repeated games where each player can be observed b y only a subset of the other players, and where players can make publi c announcements about the behavior of the players they observed. We ad dress the following question: What is the minimal level of observabili ty that is required to obtain efficient outcomes? The main result is t hat the limit set of sequential equilibrium payoffs, when the discount factor tends to one, contains the set of individual rational payoffs whenever each player is observed by at least two other players. (C) 19 96 Academic Press, Inc.