Efficient Outcomes in Repeated Games with Limited Monitoring and Impatient Players1

The Folk Theorem for infinitely repeated games with imperfect public mon-itoring asserts that for a general class of games, all strictly individually ra-tional payoffs can be supported in perfect public equilibrium (PPE) provided the monitoring structure is rich and players are patient. The object of this paper is to show that for many stage games of interest – those in which ac-tions of players interfere strongly with each other – efficient payoffs can be supported in PPE even when the monitoring structure is meager and players are impatient. Such interference is often found in resource sharing and in many other environments