Folk theorem with communication

Abstract

This paper proves a new folk theorem for repeated games with private monitoring and communication, extending the idea of delayed communication in Compte [O. Compte, Communication in repeated games with imperfect private monitoring, Econometrica 66 (1998) 597–626] to the case where private signals are correlated. The sufficient condition for the folk theorem is generically satisfied with more than two players, even when other well-known conditions are not. The folk theorem also applies to some two-players repeated games.