An Anti-Folk Theorem for Large Repeated Games with Imperfect Monitoring.

We study infinitely repeated games in settings of imperfect monitoring. We first prove a family of theorems that show that when the signals observed by the players satisfy a condition known as $(\epsilon, \gamma)$-differential privacy, that the folk theorem has little bite: for values of $\epsilon$ and $\gamma$ sufficiently small, for a fixed discount factor, any equilibrium of the repeated game involve players playing approximate equilibria of the stage game in every period. Next, we argue that in large games ($n$ player games in which unilateral deviations by single players have only a small impact on the utility of other players), many monitoring settings naturally lead to signals that satisfy $(\epsilon,\gamma)$-differential privacy, for $\epsilon$ and $\gamma$ tending to zero as the number of players $n$ grows large. We conclude that in such settings, the set of equilibria of the repeated game collapse to the set of equilibria of the stage game.