An algorithm for two-player repeated games with imperfect public monitoring

TL;DR

This paper presents a practical algorithm for computing perfect public equilibrium payoffs in repeated games with imperfect public monitoring, enhancing computational efficiency and applicability of theoretical game models.

Contribution

The paper adapts a theoretical framework into an explicit, efficient algorithm for identifying PPE payoff sets in complex repeated games.

Findings

Algorithm effectively computes PPE payoffs for various discount factors

Implementation available at https://github.com/jasmina-karabegovic/IRGames.git

Balances theoretical accuracy with computational efficiency

Abstract

This paper introduces an explicit algorithm for computing perfect public equilibrium (PPE) payoffs in repeated games with imperfect public monitoring, public randomization, and discounting. The method adapts the established framework by Abreu, Pearce, and Stacchetti (1990) into a practical tool that balances theoretical accuracy with computational efficiency. The algorithm simplifies the complex task of identifying PPE payoff sets for any given discount factor {\delta}. A stand-alone implementation of the algorithm can be accessed at: https://github.com/jasmina-karabegovic/IRGames.git.