A BEHAVIOR MODEL FOR LARGE REPEATED GAMES WITH UNCERTAIN FUNDAMENTALS

This paper presents a behavior model of large repeated Bayesian games with an unknown number of players n, correlated types and imperfect monitoring. Each of the n players behaves as if she is negligible in a continuum game, but the game theorist performs a complete Bayesian analysis of what happens with such n players in the real repeated interaction. In addition to performing correct analysis of behavior often observed, the proposed equilibria escape well-known difficulties of Bayesian analysis and also include easy-to-work-with Markov-perfect equilibria. JEL Codes: C71 cooperative Games, C72 Noncooperative Games, and C78 Bargaining Theory

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