CIRJE-F-246 "Less is More: An Observability Paradox in Repeated Games"
Author Name Michihiro Kandori and Ichiro Obara
Date November 2003
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Remarks Subsequently published in International Journal of Game Theory, 2006, Vol.34, No. 4, 475-493.
Abstract

We present a repeated prisoners' dilemma game with imperfect public monitoring, which exhibits the following paradoxical feature: the equilibrium payoff set expands and asymptotically achieves full efficiency as the public signal becomes less sensitive to the hiden actions of the players.