Public Monitoring with Uncertainty in the Time Repetitions

António Osório

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: This paper study repeated games where the time repetitions of the stage game are not known or controlled by the players. We call this feature random monitoring. Kawamori's (2004) shows that perfect random monitoring is always better than the canonical case. Surprisingly, when the monitoring is public, the result is less clear-cut and does not generalize in a straightforward way. Unless the public signals are sufficiently informative about player's actions and/or players are patient enough. In addition to a discount effect, that tends to consistently favor the provision of incentives, we found an information effect, associated with the time uncertainty on the distribution of public signals. Whether payoff improvements are or not possible, depends crucially on the direction and strength of these effects. JEL: C73, D82, D86. KEYWORDS: Repeated Games, Frequent Monitoring, Random Public Monitoring, Moral Hazard, Stochastic Processes.

Keywords: Teoria de jocs; 33 - Economia; 65 - Gestió i organització. Administració i direcció d'empreses. Publicitat. Relacions públiques. Mitjans de comunicació de masses (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cta and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/2072/179668

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:urv:wpaper:2072/179668

Access Statistics for this paper

More papers in Working Papers from Universitat Rovira i Virgili, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Ariadna Casals ().