New research reveals simple strategy for winning repeated games effortlessly!
Discounted infinitely repeated games with observable actions and extensive form correlation devices were studied. Players make decisions based on public and private information, with private messages sent by a correlation device. Subgame perfect correlated equilibria in these games have a simple intertemporal structure, where each stage's play is a correlated equilibrium of the one-shot game. The revelation principle holds, meaning any equilibrium payoff can be achieved. The set of subgame perfect equilibrium payoffs was characterized, showing that in some cases, the set of subgame perfect correlated equilibrium payoffs is larger than other equilibrium payoffs.