Abstract
We consider a model in which there is uncertainty over when a one-shot game will be played. We show how a mechanism designer can implement desirable outcomes in certain economic games by manipulating only the probability that the game is played in a given round while leaving all other aspects of the game unchanged. We also show that if there is no discounting, this uncertainty imparts a sequential structure that is almost mathematically equivalent to a repeated version of the game with discounting. In particular, a folk theorem applies to such games. Thus, games of probabilistic cheap provide a third interpretation of the repeated game framework with the additional feature that expected payoff is invariant to the probability of the game ending.
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Received: 10 May 1999/Accepted: 16 October 2000
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Chakravorti, B., Conley, J. & Taub, B. Probabilistic cheap talk. Soc Choice Welfare 19, 281–294 (2002). https://doi.org/10.1007/s003550100111
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DOI: https://doi.org/10.1007/s003550100111