Some Asymptotic Results in Discounted Repeated Games of One-Sided Incomplete Information

Abstract: The paper analyzes the Nash equilibria of two-person dis-counted repeated games with one-sided incomplete information and known own payo®s. If the informed player is arbitrarily patient relative to the un-informed player, then the characterization for the informed player's payo®s is essentially the same as that in the undiscounted case. This implies that even small amounts of incomplete information can lead to a discontinuous change in the equilibrium payo ® set. For the case of equal discount factors, however, and under an assumption that strictly individually rational payo®s exist, a result akin to the Folk Theorem holds when a complete information game is perturbed by a small amount of incomplete information.