Imperfect public monitoring
Repetition in which players observe only a noisy public signal of what was played rather than the actions themselves, so punishment must be triggered on evidence that is sometimes wrong and the efficient outcomes of the perfect-monitoring folk theorem are no longer attainable.
Games that show it
Know these first
Sources
- Mailath, G. & Samuelson, L. (2006). Oxford University Press.
- Fudenberg, D. & Maskin, E. (1986). Econometrica 54(3), 533-554.
- Friedman, J. (1971). Review of Economic Studies 38(1), 1-12.