Unlocking Nearly Efficient Payoffs in Repeated Games with Information Purchase
Discounted repeated games allow players to buy information about their opponents' past actions. The study shows that with at least three players and four actions each, nearly efficient payoffs can be achieved in Nash equilibrium even with high monitoring costs. This result also holds with at least four players and three actions each. The findings suggest that strategic decision-making in repeated games can lead to optimal outcomes, even when information is costly to obtain.