We show that in repeated interactions the avenues for effective provision of incentives depend crucially on the type of information players observe. We establish this conclusion for general repeated two-player games in which information arrives via a continuous-time stationary process that has a...

This paper investigates a new class of two-player games in continuous time, in which the players' observations of each other's actions are distorted by Brownian motions. These games are analogous to repeated games with imperfect monitoring in which the players take actions frequently. Using a...

We define belief-free equilibria in two-player games with incomplete information as sequential equilibria for which players' continuation strategies are best replies after every history, independently of their beliefs about the state of nature. We characterize a set of payoffs that includes all...

We introduce a class of strategies that generalizes examples constructed in two-player games under imperfect private monitoring. A sequential equilibrium is belief-free if, after every private history, each player's continuation strategy is optimal independently of his belief about his...

We prove the folk theorem for discounted repeated games under private, almost-perfect monitoring. Our result covers all finite, n-player games that satisfy the usual full-dimensionality condition. Mixed strategies are allowed in determining the individually rational payoffs. We assume no...

We study the role of observability in bargaining with correlated values. Short-run buyers sequentially submit offers to one seller. When previous offers are observable, bargaining is likely to end up in an impasse. In contrast, when offers are hidden, agreement is always reached, although with...