Staff Report 254

Dynamic Games With Hidden Actions and Hidden States

Narayana Kocherlakota | Consultant
Harold L. Cole

Published September 1, 1998

Abstract
We consider a class of dynamic games in which each player’s actions are unobservable to the other players and each player’s actions can influence a state variable that is unobservable to the other players. We develop an algorithm that solves for the subset of sequential equilibria in which equilibrium strategies depend on private information only through the privately observed state.



Published In: Journal of Economic Theory (Vol. 98, No. 1, May 2001, pp. 114-126)

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