A folk theorem for minority games
Renault, Jérôme; Scarlatti, Sergio; Scarsini, Marco (2005), A folk theorem for minority games, Games and Economic Behavior, 53, 2, p. 208-230. http://dx.doi.org/10.1016/j.geb.2004.09.013
TypeArticle accepté pour publication ou publié
Journal nameGames and Economic Behavior
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Abstract (EN)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”). The players in the same room do not recognize each other, and 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 an unusual way, the pure actions that were played before the start of the punishment.
Subjects / KeywordsRepeated games; Imperfect monitoring; Public signals
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