Communication in Repeated Games with Imperfect Private Monitoring

This paper examines repeated games in which each player observes a private and imperfect signal on the actions played and in which players are allowed to communicate using public messages. Providing incentives for players to reveal their observations generate revelation constraints which, combined with signal imperfections, may be a source of inefficiencies. However, the author shows that, by delaying the revelation of their observations, players may reduce the cost of deterring deviations. With at least three players, he obtains a Nash threat version of the folk theorem. With two players, the author shows that an efficient outcome can (almost) always be approximated.