Working Paper 583

Dynamic Games With Hidden Actions and Hidden States

Narayana Kocherlakota | Consultant
Harold L. Cole

Published July 1, 1997

We consider the large 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 are Markov in the privately observed state.

Download Paper (pdf)