Collusion through mediated communication in repeated games with imperfect private monitoring

This paper studies repeated games with imperfect private monitoring when there exists a third-party mediator who coordinates play by giving non-binding instructions to players on which action to take and by collecting their private information. The paper presents a Nash-threat folk theorem for a communication equilibrium based on such mediation when monitoring is jointly <InlineEquation ID="Equ1"> <EquationSource Format="TEX">$\epsilon$</EquationSource> </InlineEquation> -perfect in the sense that every player is almost perfectly monitored collectively by other players. Copyright Springer-Verlag Berlin/Heidelberg 2005