Limits of correlation in repeated games with bounded memory

Gilad Bavly, Ron Peretz

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


We study repeated games in which each player i is restricted to (mixtures of) strategies that can recall up to k i stages of history. Characterizing the set of equilibrium payoffs boils down to identifying the individually rational level (“punishment level”) of each player. In contrast to the classic folk theorem, in which players are unrestricted, punishing a bounded player may involve correlation between the punishers’ actions. We show that the extent of such correlation is at most proportional to the ratio between the recall capacity of the punishers and the punishee. Our result extends to a few variations of the model, as well as to finite automata.

Original languageEnglish
Pages (from-to)131-145
Number of pages15
JournalGames and Economic Behavior
StatePublished - May 2019

Bibliographical note

Publisher Copyright:
© 2019 Elsevier Inc.


  • Bounded complexity
  • Bounded recall
  • Concealed correlation
  • Equilibrium payoffs
  • Finite automata
  • Repeated games


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