An algorithm for two-player repeated games with imperfect public monitoring

Abstract

This paper introduces an explicit algorithm for computing perfect public equilibrium (PPE) payoffs in repeated games with imperfect public monitoring, public randomization, and discounting. The method adapts the established framework by Abreu, Pearce, and Stacchetti (1990) into a practical tool that balances theoretical accuracy with computational efficiency. The algorithm simplifies the complex task of identifying PPE payoff sets for any given discount factor {\delta}. A stand-alone implementation of the algorithm can be accessed at: https://github.com/jasmina-karabegovic/IRGames.git.