Learning to disagree in a game of experimentation

Alessandro Bonatti and Johannes Hörner

Journal of Economic Theory, 2017, vol. 169, issue C, 234-269

Abstract: We analyze strategic experimentation in which information arrives through fully revealing, publicly observable “breakdowns.” When actions are hidden, there exists a unique symmetric equilibrium that involves randomization over stopping times. With two players, this is the unique equilibrium. Randomization leads to dispersion in actions and to belief disagreement on the equilibrium path. The resulting lack of coordination has significant welfare consequences. In contrast, when actions are observable, the equilibrium is pure and welfare improves.

Keywords: Experimentation; Free-riding; Mixed strategies; Monitoring; Delay (search for similar items in EconPapers)
JEL-codes: C73 D83 O33 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053117300248
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Learning to Disagree in a Game of Experimentation (2017)
Working Paper: Learning to Disagree in a Game of Experimentation (2015)
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:eee:jetheo:v:169:y:2017:i:c:p:234-269

DOI: 10.1016/j.jet.2017.02.007

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().