Common Learning and Cooperation in Repeated Games

Common Learning and Cooperation in Repeated Games

By Takuo Sugaya, Yuichi Yamamoto
April 26,2019Working Paper No. 3781

We study repeated games in which players learn the unknown state of the world by observing a sequence of noisy private signals. We find that for generic signal distributions, the folk theorem obtains using ex-post equilibria. In our equilibria, players commonly learn the state, that is, the state becomes asymptotic common knowledge.

Keywords
repeated game, private monitoring, incomplete information, ex-post equilibrium, individual learning