Feasibility and individual rationality in two-person Bayesian games

8 years 1 months ago

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We de…ne feasible, posterior individually rational solutions for twoperson Bayesian games with a single informed player. Such a solution can be achieved by direct signalling from the informed player and requires approval of both players after the signal has been sent. Without further assumptions on the Bayesian game, a solution does not necessarily exist. We show that, if the uninformed player has a “uniform punishment strategy”against the informed one, the existence of a solution follows from the existence of Nash equilibrium in in…nitely repeated games with lack of information on one side. We consider the extension of the result when both players have private information.

Françoise Forges, Ulrich Horst, Antoine Sal

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